4 things about Budget 2021 Malaysia's marketing and biz sectors should take note of

For the first time ever, Malaysia has revealed a budget outline following a consultations covered all 14 states that involved over 38 dialogues over 40 businesses and industries, said Minister of Finance Tengku Zafrul Tengku Abdul Aziz. In his recent Budget 2021 speech, Zafrul Aziz said the budget was formulated on three crucial goals – the rakyat’s well being, business continuity and economic resilience. The three goals are a continuity of the PRIHATIN, PRIHATIN SME PLUS, PENJANA and KITA PRIHATIN stimulus packages which were announced in March and April this year.

This year, the Malaysian government set aside RM1.8 billion for the implementation of the movement control and public health service needs related to COVID-19. In 2021, the finance minister said an additional RM1 billion will be allocated to curb the third wave of the pandemic. Meanwhile, the government also decided to raise the ceiling of the COVID-19 fund by RM20 billion to RM65 billion.

This year has certainly been a challenging one for both companies and individuals. Moving forward, here are some changes in Budget 2021 which Malaysian businesses as well as the marketing and advertising industry should take note of.

1. More support for local products

The government is setting aside RM25 million for the "Buy made in Malaysia programme" and "Micro franchise development" and "Affordable franchise" programmes. Additionally, RM150 million will be allocated for training programmes and sales assistance as well as digital equipment for 100,000 local entrepreneurs to encourage the adoption of eCommerce under the eCommerce SME and micro SME campaign. At the same time, Zafrul Aziz said the government is setting aside RM150 million to implement the "Shop Malaysia online" initiative together with Shopee Malaysia to encourage online spending, which will benefit 500 thousand local sellers including the halal products and handicrafts entrepreneurs.

It is also allocating RM 35 million ringgit to promote Malaysian-made products and services under the Trade and Investment Mission.

In July, Shopee rolled out the second edition of the Shop Malaysia Online campaign in partnership with the Ministry of Domestic Trade and Consumer Affairs, alongside a new in-app portal available on its app and website. Besides giving local sellers exposure, Shopee, in partnership with the public sector, will offer weekly discounts, cashback and free shipping vouchers according.

In a separate Budget 2021 commentary, Shopee's regional managing director Ian Ho said it is encouraged by the continuation of initiatives such as Shop Malaysia Online as well as micro, small and medium enterprises eCommerce campaign.

"The Shop Malaysia Online which ran on Shopee from August to September saw some 83,000 participating local sellers and brands jointly recording over half a billion Ringgit in sales on our platform. The subsidies in the form of discounts, cashbacks and free shipping vouchers benefited close to three million Malaysians, thereby helping ease cost of living pressures," Ho said. He added that the company has also effectively digitised more than 40,000 Malaysian MSMEs through the PENJANA MSME eCommerce campaign where both Shopee and the government provided over RM1,500 in benefits to new eCommerce sellers.

2. Sustainability of tourism industry

To boost the competitiveness of the country’s health tourism industry, the government is allotting RM35 million to the Malaysia Healthcare Travel Council. On the tourism front, the government is helping those impacted by COVID-19 in the tourism sector by allocating RM50 million for training and placements for 8,000 employees of airline companies in Malaysia.

Malindo Air recently cut over 2,000 of its employees, according to the New Straits Times, while the Malaysia Aviation Group reportedly put forth an early retirement scheme for staff last month amidst negotiations with lessors and creditors over Malaysia Airline's (MAB) restructuring exercise. Bernama reported that a MAG Early Retirement Application form was made available to staff across all its subsidiaries, including MAB, Firefly, MASwings, MAB Kargo, AeroDarat Services, Hijrah Biru and the MAB Academy.

Keeping all of these developments in mind, the government will also provide employment opportunities for 500 people in the local and Orang Asli communities as tour guides at all national parks to boost the ecotourism segment.

Zafrul Aziz added that the government has also listened to the concerns of traders and hawkers in Sabah who have been deeply affected by the lack of tourists. As such, A grant of RM1,000 will be handed out to 20,000 traders and hawkers in Sabah, as well as taxi drivers, e-hailling, rental cars and tour drivers in the state.

Additionally, RM50 million will be assigned to maintain and repair tourism facilities nationwide. An allocation of RM20 million will be offered to improve the infrastructure and intensify the promotion of Cultural Villages in Terengganu, Melaka, Sarawak and Negeri Sembilan. Also, RM10 million will be allocated to ensure that national heritage buildings such as the Sultan Abdul Samad Building and Carcosa Seri Negara will continue to be preserved and become tourism icons.

3. Prioritising automation and digitalisation

Malaysia will also focus on long-term productivity via the use of new technology to accelerate the transformation towards a high-income economy.

Currently, the government has assigned RM1 billion for the "Industrial digitalisation transformation" scheme, which aims to boost digitalisation activities. According to Zafrul Aziz, the availability of the funds will be extended until 31 December 2023.

The government is also setting aside an additional RM150 million for the SME digitalisation grant scheme and Automation grant. The eligibility condition for these grants have also been relaxed for micro SMEs and start-ups that have been operating for at least six months.

4. Driving foreign investments

While many businesses were affected by COVID-19, sectors such as eCommerce, logistics and education technology continued to grow strongly, Zafrul Aziz said. This scenario coupled with the turmoil of global trade provides an opportunity for Malaysia to attract new companies, new investments and new economic opportunities.

To facilitate new investments, RM1 billion will be provided as a special incentive package for high value-added technology. Among others, this fund aims to support R&D investment in aerospace as well as electronic clusters such as in Batu Kawan, Penang and Kulim, Kedah industrial parks.

A High Technology Fund worth RM500 million will be provided by Bank Negara Malaysia to support high technology and innovative companies. The fund will enable Malaysia to remain competitive in the global supply chain and maintain the supply chain ecosystem and protect high skilled jobs.

Join us this 8-11 December as we address the new realities for PR and crisis communicators, explore how brands are dealing with the impact of COVID-19 , and discuss areas of priority for communications. It's an event you would not want to miss out. Register now!

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