The 2014 Budget does not provide any new strategy to resolve the socioeconomic problems of young Malaysians especially in the areas of jobs and debt, says Steven Sim.
Young people in Malaysia today are faced with the following trilemma:
1) youth unemployment is high at 10.3 per cent and the highest number of unemployed persons are those aged 20-24 being 40 per cent of the total unemployed in the country.
2) youth underemployment is serious, at about 15.1 per cent, facing problems such as low pay; 82.5 per cent of young people aged 30 and below earn less than RM3,000 a month.
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3) brain drain is high among young people, two out of 10 degree holders migrate to OECD countries and Singapore in search of better opportunities.
This situation is made worse by the problem of high indebtedness among young people where 47 per cent of young workers spent 30 per cent or more of their monthly income to service debts.
The 2014 Budget does not provide any new strategy to resolve the socioeconomic problems of young Malaysians especially in the areas of jobs and debt. It repeats old programmes “to rescale, upscale and retrain”, which have been the buzzwords in previous years as well. If such programmes had worked, the above trilemma would not have existed.
Here are five reasons why the 2014 Budget is bad for young Malaysians:
Firstly, the introduction of the new goods and services tax (GST) at 6 per cent will affect young Malaysians the most because they are generally the target of consumerism.
Secondly, 82.5 per cent of young Malaysians earn below RM3,000 monthly; thus they did not need to pay income tax previously. Hence the expansion of the tax bracket and the new income tax exemption for those earning RM4,000 and below do not bring any new benefit to the majority of young people.
Thirdly, through the GST, while previously they did not need to pay income tax, young Malaysians now will have to pay the new tax, estimated to be about RM660 (projection for those earning about RM2,500 a month) and this may reach upto RM1,000 a year. Even with the increase of BR1M, the net effect is still, young Malaysians will be poorer through paying the new tax.
Fourthly, the abolishment of sugar subsidy means a double whammy against young people who now also have to pay more for food and beverages.
Fifthly, for young Malaysians in Sabah and Sarawak, the implementation of GST, and the abolishment of subsidy along with the existing cabotage policy will result in worse price increase in these states compared to the Peninsula. The cost of transportation, including air fare will also increase and this will add new burdens to those living in Sabah and Sarawak who are dependent on air travel for their socio-economic activities.
It is clear that the 2014 Budget is sad news for young Malaysians. We are becoming the victims of a federal government who is now forced to implement austerity measures due to years of mismanagement and corruption.
Steven Sim is the Member of Parliament for Bukit Mertajam.