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Gig economy grant will encourage workers to contribute to SOCSO, EPF

KUALA LUMPUR: The matching grant of up to RM50 million for the gig economy would encourage workers to contribute to the Social Security Organisation (SOCSO) and the Employees Provident Fund (EPF).

Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the incentive, announced under the National Economic Recovery Plan (PENJANA), would mean that the gig economy workers' social safety net is being taken care of.

"We particularly like measures on the digitalisation and gig economy. There is also e-wallet of RM50 as well as e-voucher and promotional code that would encourage Malaysians to spend online," he told Bernama yesterday.

Apart from that, he said matching grant for the small and medium enterprises (SMEs) to make the digital transformation via training and subsidies should encourage them to leverage on the digital platform.

"On the mainstream economics, the reintroduction of House Ownership Campaign and sales tax exemption for automotive completely knocked down (CKD) products should help to propel the property and automotive sector," he added.

Bank Muamalat Malaysia Bhd economist Izuan Ahmad said the initatives under PENJANA showed that the government was really determined to support and assist the SME sector, which has been one of most vital contributors to the country's economy as well as employment growth.

"The various measures announced under PENJANA clearly signify the government's aspiration and target to expedite SMEs' adoption of digitalisation as the way of conducting their businesses moving forward.

"Besides that, total financing packages amounting to around RM5.6 billion are allocated for the local SME players in order to support their business operations and ensure their financial capacity and sustainability in riding through the current challenging business environment," he added.

He said the government had strived to ensure the nation's road to recovery was enhanced by supporting the SME sector, as well as digitalisation of most government and business operations, in order to improve economic growth from the third quarter onwards until full recovery by next year.

This, he added, was still highly dependent on the success of containing the virus.

"Support towards the workforce under the gig economy is also allocated in the plan to nurture and sustain the informal sectors that are also contributing to the economic well-being. This will also simultaneously promote and cultivate the online business culture," he added.

Overall, Afzanizam said PENJANA had addressed the concerns in the labour market, the transition to a new normal especially in respect to digitalisation, as well as the mainstream economic sectors such as property and automotive.

"It also shows that the government is committed to promoting growth as the government is willing to tolerate with higher deficits. Should the reopening of the economy continue to do well, we can expect better growth in the second half of this year," he said.

Under the PENJANA plan, Prime Minister Tan Sri Muhyiddin Yassin announced 40 initiatives worth RM35 billion, where the bulk of the allocation were directed towards job security including those in the gig economy, re-skilling and easing cash flow for businesses.

This will be done through a matching grant of up to RM50 million for gig economy platforms who contribute for their gig workers to the employment injury scheme under SOCSO of up to RM162 and the Employees' Provident Fund's (EPF) i-Saraan contribution of up to RM250 yearly.

It will also provide Malaysia Digital Economy Corporation (MDEC) RM25 million for the Global Online Workforce (GLOW) programme, that serves international clients while working online from home.

As an effort to encourage micro enterprises and SMEs to use digital services, the government together with the private sector will finance matching grants of RM140 million.

"This allocation will be used for training sessions, subsidies for sellers and assistance for sales. This initiative will be driven by MDEC together with selected e-commerce platforms," he said.

With the aim to boost the adoption of e-commerce by micro enterprises and SMEs in order to widen their market reach, the government, via its Micro and SMEs E-commerce campaign, will allocate RM70 million for eligible micro enterprises and SMEs onboard to move towards business digitisation through a co-funded programme with MDEC and e-commerce platforms.

The government would also cooperate with the e-commerce platforms to co-fund digital discount vouchers to boost online spending on products from local retailers.