B40, M40: Focus budget on income creation, access to funds 

Initiatives such as income tax exemptions, price control of essential items, and proper enforcement will lead to an increase in the people’s purchasing power 


THE Middle 40% (M40) income group are wishing that the upcoming Budget 2023 would focus on jobs and wealth creation initiatives to help overcome their predicament of dwindling income amid a high inflation environment. 

While hoping that the government will not neglect them in addressing the rising cost of essentials, the M40 are looking forward to the budget extending a lifeline to consumers and businesses to increase the rakyat’s purchasing power. 

The bottom 40% (B40) income group, in the meantime, wish that their access to funds is made easier to benefit from aids and micro-loans offered by the government. Bureaucracy is making it difficult for them to expeditiously gain from the various assistances announced to the public. 

Ahmad Ridhuan Alauddin

More Job Creation 

Client services manager Ahmad Ridhuan Alauddin suggested that the upcoming budget should focus on more job creation and extend a lifeline to consumers and businesses to increase the people’s purchasing power, which he said has been impacted by the high inflation rate. 

“Purchasing power depends on real income, which means that more jobs need to be created. 

“With more people in employment, more money can be spent on products and services,” he told The Malaysian Reserve (TMR) recently. 

He added that the government must also bring in more foreign direct investments into the country and give these firms more tax and trade incentives to invest in Malaysia. 

He also said initiatives such as income tax exemptions, price control of essential items, and proper enforcement will lead to an increase in the people’s purchasing power. 

Tap into Industrial Wealth

Web developer Tevanraj Elengoe told TMR that the government should tap into the wealth of industry expertise, technical and vocational education and train graduates with the skills and needs of the Industrial Revolution 4.0 (IR4.0), especially in Internet of Things (IoT), Industrial IoT (IIoT), robotics, artificial intelligence (AI), big data and cybersecurity. 

Tevanraj Elengoe

Tevanraj Elengoe

Tevanraj said the government can play a big role in training undergraduates in the fields of IoT and IIoT to be employed at participating Malaysian companies with a higher-than-average compensation or salary upon graduation.

“I want to see the value of public-private partnerships, where reputable universities will provide mentors with the relevant qualifications and experience to support our fresh graduates,” he said. 

He added that this is to groom future leaders with the essential talents of technical and soft skills as required by the industry. 

Tevanraj also hoped that this will ultimately contribute towards increasing the country’s productivity, efficiency and global competitiveness as an investment destination regardless of the global economic sentiments. 

The M40 group refers to the middle-class group with household income of between RM4,850 and RM10,959 per month, representing 40% of the country’s population. 

Lower Tax Bands 

Mohd Zulfadzli

Engineer Mohd Zulfadzli Abdul Halim said while it is good that the B40 group will be given priority in the introduction of new policy countermeasures in the economic field, the M40 group may need customised support since their contribution is critical to restoring the country’s financial fortunes. 

“The M40 group, which is bearing the brunt of rising living costs without an equal increase in earnings, has not been given a helping hand, at least temporarily. 

“Government should lower the level tax bands to be widened to provide the M40 with extra disposable income. 

For example, they have also not been given extra child relief allowances or any support in the form of a freeze on toll charges and interest deductions on their housing loan interest,” he said. 

“Those in the M40 category will remain burdened with mortgages and have to suffer in silence if they are left out from the next round of goodies given to the B40 group,” Zulfadzli added. 

Tax Relief to M40 Group 

Echoing this sentiment was factory supervisor Abdul Halim Md Yasin who said the government should have focused on providing tax relief and support to the M40 group. 

He opined that the budget should encourage savings among the younger generation so that they would be able to maintain their lifestyle without seeking government help in their later years. 

“I believe that Budget 2023 should offer incentives to top earners by lowering personal taxes to prevent a brain drain,” he added. 

Better Policies for Women

Ika Zainuddin

Meanwhile, digital entrepreneur Ika Zainuddin said the government’s support in implementing better policies and programmes for women would be most welcome in Budget 2023. 

“We must make sure that national response strategies meet women and girls’ needs and empowering them should be one of the focuses of the budget,” she said to TMR. 

She added that the government must continue to focus on priority areas that are fundamental to gender equality. 

“There have been several schemes from the previous budgets that focus on providing women with their due social and financial dignity but we need more of these. 

“As our past was filled with instances of gender inequality, I am glad that the government has come forward to bridge the gender gap, empower women and uplift education,” Ika said. 

She also cited data from the World Economic Forum 2021 Global Gender Gap report which stated that women’s estimated earned income is only one-fifth of men’s. 

The government and private sector must join hands to empower women economically which would also give a big boost to the nation’s GDP. 

“There has to be more investment towards gender equality and this starts from home. It is a national loss if women are not made a part of development,” she elaborated. 

The B40 income group wish that their access to funds is made easier to benefit from aids and micro-loans offered by the government

Private Sector Partnership 

Meanwhile, consultant Chin Tin Mun said the initiative for a long-term partnership with the private sector is a testament to the government’s continuous focus on creating high-value jobs to ensure Malaysians reap the long-term benefits of investments in the country, in tandem with enhancing the overall industry’s ecosystem to drive sustainable economic growth on the road to recovery post-Covid-19. 

“This is the move that should be taken in Budget 2023 if we want to see prosperity in this country,” she said. 

She also mentioned that international and local industry players need to establish a new syllabus to bridge the gap between the supply of local engineers and the demand of the industry, especially for IoT and IIoT. 

“The government can help with some allocations to higher learning centres, both public and private universities,” she added. 

Nor Syafiqah Khadiron

Making Commuting Easier

For business operations executive Nor Syafiqah Khadiron, a fast, cheap and reliable journey to work is the dream of every city dweller, but for many, it is just that — a dream. 

Syafiqah said making daily commutes easier, cheaper and more comfortable will make more people use public transportation while encouraging people to walk or cycle and creating disincentives for private vehicles are also important for curbing air pollution, gas emissions and traffic congestion. 

“This can be by reducing parking spaces, creating more bicycle lanes, replacing car lanes with exclusive bus lanes and pedestrianising streets,” she told TMR. 

Nor Syafiqah also suggested the government to make public transport safer for women, like improving lighting and other safety features, designing transport fleets to accommodate large bags and strollers especially for off-peak journeys and offering family tickets to make travel cheaper for caregivers. 

Restore Lost Jobs 

For Hafizol Hakami, the government will need to prioritise those who have lost their jobs due to retrenchments and those whose business incomes have been severely impacted by pandemic Covid-19. 

“To restore lost jobs and create new employment, the government must look into new economic activities and spur consumer spending,” he said. 

He said, the people’s overall purchasing power will also be lifted if the government can attract foreign and domestic investments as these activities will create job and income opportunities for unemployed skilled labour, and SMEs supplying goods and services to the investment projects. 

The M40 are looking forward to the Budget extending a lifeline to consumers and businesses to increase the rakyat’s purchasing power

Accessable Bank Loans 

Meanwhile, appam seller Rajamani Kannapathy wished bank loans were easier to get to allow him to move past the impacts of the pandemic and the higher costs of goods. 

“Small income groups like us are still feeling the effects of the pandemic and now high inflation is suffocating us. To make things worse, we are finding it tough to get a loan to help with the daily grind,” he said. 

Ahmad Syafeq Abdullah

Tackling Poverty 

Tissue seller Ahmad Syafeq Abdullah also urged the government to look into bureaucracy if it is serious about tackling poverty in Malaysia, especially in urban areas. 

“Bureaucracy is killing me; there are a lot of red tapes just to get some small aid from the government,” he said. 

He said a “total affordability” approach for the B40 must be re-evaluated. 

“People like me are struggling. We are struggling just to get a decent life,” he said. 

Recovery of Local Businesses

University of Nottingham Malaysia (UNM) Assistant Professor of Economics Dr Saizi Xiao said small and medium enterprises (SMEs) have faced numerous challenges and a Pre-Budget Statement mentioned that Budget 2023 would implement comprehensive reforms to address this issue, to boost Malaysia’s competitiveness and resilience. 

“SMEs remain struggling on multiple fronts with insufficient funding, increased costs of hiring skilled workers and lack of training being some of the pain points,” she said in a recent statement. 

Grants, Low Interest Loans

Dr Teo Wing Leong

Meanwhile, UNM Head of the School of Economics and Associate Professor Dr Teo Wing Leong suggested targeted measures like grants, low-interest loans, tax incentives, and access to training programmes. 

“Introducing policies encouraging adoption of automation, digitalisation and engagement in research and development are vital in helping empower business owners. 

“Comprehensive reforms in the economic and social sectors will be crucial in making Malaysia more competitive globally,” he said in the same statement. 

He said this includes market liberalisation and education reforms to emphasise job-readiness of the country’s youth. 

Teo recommended grants for education, to make digital technology and digital economy an integral part of the curriculum at all levels, and public competitions with lucrative prizes to encourage digital innovations. 

Finally, academicians were of the view that Budget 2023 must outline priorities that focus on the recovery of Malaysian businesses. 

This article first appeared in The Malaysian Reserve weekly print edition