MALAYSIA BUDGET 2019: Improving Employment and Employability

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MALAYSIA BUDGET 2019: Second Focus of Strategy 5: Improving Employment and Employability



In less than 2 months we will usher in the new year of 2019. Momentum building in ushering the new years with the recent announcement of Malaysian Budget 2019. The official budget kicked start with the theme ‘A Resurgent Malaysia, a Dynamic Economy, a Prosperous Society‘, Budget 2019 by YB Tuan Lim Guan Eng, Minister of Finance in the Dewan Rakyat. 

What are some of the benefits for Corporate world both for employers and employees alike at a glance? Here are some highlights tabulated from various sources of news recently. Going in-depth on the Second Focus of Strategy 5: Improving Employment and Employability.

The current unemployment rate is 3.4% in Malaysia. Despite the fact this percentage is viewed as enjoying full employment by world’s standards, is is found that there is still structural problems which will contribute to long-term unemployment leaning heavily on the youth.

The government has come up with 9 STEPS under SECOND FOCUS: STRATEGY 5 to address this issue.


STEP 1: HRDF Launch 2 New Programmes “Apprenticeship” and “Graduate Enhancement Programme for Employability” (GENERATE)


RM 20 million funds in matching grants is allocated to help an estimated 4,000 youths.**A rough calculation of RM 5k per youth. Objective: Improve marketability of graduates from institutions of higher-learning.


STEP 2: To Increase Employment Opportunities For Malaysians Age 60 and above.


By 2020 it is estimated there will be 1 million Malaysians reaching the age 61 – 65 years old, in these modern times still considered productive and active.


Benefit to employer who hire or retain retirees:

  • Employer portion for EPF contribution cut from 6% to 4% effective 1 January 2019
  • Tax deduction to employers who employ this age group for salaries paid out up to RM4k.  


Benefit for employee of this age group:

  • Continuation of employment
  • Employee do not required to contribute to EPF deduction, increasing the take home pay.


STEP 3: Further tax deduction for employers hiring ex-convicts up to salary of RM 4,000.


The rational of this move is to integrate the ex-convicts into the society positively. Ensuring they are not left behind as they are still able to contribute to the country’s economic growth.


STEP 4: One-Off RM 500 assistance to Government pensioners who are allocated less than RM1000 per month.


STEP 5: Benefit for ‘Contract of Service’ personnels working with Government and serving the nation.


  • There are 30,000 who are currently employed under the contract of service. They do not enjoy full government benefits as they are not classified as civil servants. A budget of RM 10 million per annum will be allocated towards the healthcare for the parents of these staff.
  • They may also apply ‘Quarantine Leave’ to care for their children with infectious diseases, effective 12 NOV. 2018.


STEP 6: 7 Days of ‘Unrecorded Leave’ for religious purposes. For both Muslims and Non-Muslims.


STEP 7: Minimum wage has been raised to RM 1,100 per month for the whole of Malaysia starting 1 January 2019.


STEP 8: Effort To Reduce Wage Disparity In Public-listed Companies With New Regulations.


  • Public-listed companies in Malaysia will be required to publicly disclose key pay metrics annually in their annual report.
  • Information should include the ratios of ‘highest to median wage per worker’ and the ‘highest and lowest wage earned’ as well as a statement by the company of how they intend to improve their employees’ average pay.


STEP 9: A Review On Labour Laws And Workers Welfare.


Setting up an Industrial Appeals Court. This is to improve the labour market and to ban discriminatory practices by employers. At the same time expediting the resolutions for industrial disputes between employers and employees.


To understand further, the government has 3 main focus and 12 strategies. They are:


First Focus: Implementing institutional reforms


  • Strategy 1: Strengthening Fiscal Administration
  • Strategy 2: Restructuring and Rationalising Government Debt
  • Strategy 3: Raising Government Revenue


Second Focus: Ensuring the socio-economic well-being of Malaysians


  • Strategy 4: Ensuring the Rakyat’s Welfare and Quality of Life
  • Strategy 5: Improving Employment and Employability
  • Strategy 6: Enhancing Health & Social Welfare Protection
  • Strategy 7: Raising Real Disposable Income
  • Strategy 8: Education for a Better Future


Third Focus: Fostering an entrepreneurial economy


  • Strategy 9: Unleashing the Power of the New Economy
  • Strategy 10: Seizing Opportunities in the Face of Global Challenges
  • Strategy 11: Redefining the Role of Government in Business
  • Strategy 12: Ensuring Equitable and Sustainable Economic Growth


**Content taken from Ministry of Finance Malaysia, Budget 2019 (CONTENT – pg 5)

November 9th, 2018|How-to Guide|