Budget 2020 Employment Highlights

Budget 2020 Employment Highlights

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KUALA LUMPUR: Minister of Finance YB Lim Guan Eng announced the Budget 2020 in Parliament on 11 October 2019. The 2020 Budget will allocate a total of RM297 billion in expenditure compared to an estimated RM314.5 billion in 2019. The theme of the 2020 budget is “Driving Growth and Development to Shared Prosperity,” which will include four focus areas  to map out the goal of improving Malaysia’s economy and the development of digital and mechanical technology available today.


The four focus areas are as follows:

1) Driving economic growth in the new economy and digital era

2) Investing in Malaysians – Improving human capital

3) Establishing a united, inclusive and equitable society

4) Revitalisation of public institutions and finances

We have summarised and highlighted some of the major developments in the employment sector followed by the resource allocations during the speech below:


Improving Employment and Employability; #MalaysiaKerja

Incentives are provided by the Employees Provident Fund. The government hopes to create 350,000 jobs for Malaysians in five years and to reduce the reliance of 130,000 foreign workers. Total budget for the Malaysians@Work program is RM6.5 billion over the next five years. The Government will undertake the following actions to boost employment and employability:


1. Graduates at Work; #GraduanKerja

  • Graduates who have been unemployed for more than a year and have been in employment will earn a bonus of RM500 on top of their salaries every month for two years.


2. Women at Work; #WanitaKerja

  • Women aged between 30 and 50 years, who return to the workforce after at least a year, will enjoy a RM500 incentive from the government for two years, and RM300 for employers, as well as income tax exemption until 2023.
  • Increase in mandatory maternity leave from 60 days to 90 days for the private sector.
  • RM10 million allocation to promote women in sports.
  • Annual interest subsidies of 2% to reduce borrowing costs and RM200 million to provide loans of up to RM1 million per SME will be introduced to boost women entrepreneurs.


3. Locals at Work; #WatanKerja

  • Malaysians replacing foreigners in low-skill jobs to get RM350 or RM500, depending on their business, every month for two years. Their employers will get RM250 a month during the same period.
  • Civil servants will be given early redemption of Accumulated Leaves (Gantian Cuti Rehat) for up to 75 days as replacement pay for those who have worked for at least 15 years.
  • Socso protection has been expanded to 18 groups of self-employed workers, including fishermen, own companies and partnerships.
  • EPF to be extended to contract for service workers and professionals, but on a voluntary basis for a start.
  • Additional RM100 bonus for students of Technical and Vocational Education and Training (TVET) Special tax exemption for businesses involved in the national special training system for two years. Tax exemptions for businesses in the TalentCorp-approved internship program.


4. Digital Content Creation

  • RM20 million to MDEC to encourage local players to produce digital content.


5. Increasing Wages

  • Minimum wage will be raised to RM1,200 for major cities, effective 2020.
  • Singles who are above 40 and earning less than RM2,000 a month will be eligible for RM300 Bantuan Sara Hidup aid.
  • Disabled individuals aged 18 and above will be eligible for RM300 Bantuan Sara Hidup aid.


6. Civil servants

  • Civil servants with at least 15 years’ service allowed early redemption of Accumulated Leave (Gantian Cuti Rehat) for up to 75 days as replacement pay.
  • RM26 million to give Rela members higher allowance of RM2 per hour.
  • RM35 million to give 14,000 firemen special allowance of RM200.
  • RM35 million to give one-off RM500 payments to 70,000 armed forces personnel who hold Pingat Jasa Malaysia.
  • Special payment of RM500 for civil servants Grade 56 and below.
  • Special payment of RM250 for retirees and non-pensionable veterans.
  • Free personal accident insurance (up to RM100,000 coverage) for two years to new government housing loan borrowers.



Education for a Better Future

The government has increased allocations for the Ministry of Education (MOE) to RM64.1 billion in Budget 2020, compared to RM60.2 billion in Budget 2019 and the biggest allocation for any ministry. All national schools will benefit from this allocation, including Sekolah Jenis Kebangsaan Cina (SJKC), Sekolah Jenis Kebangsaan Tamil (SJKT), boarding schools, MARA Junior Science Colleges, Tahfiz Schools and private Chinese secondary schools, among others.

  • Budget allocation for Technical and Vocational Education and Training(TVET) increased from RM5.7 billion to RM5.9 billion.
  • RM1.3 billion for education institutions under Mara and RM2 billion to fund loans for 50,000 students.
  • RM192 million for professional certification programmes under Yayasan Peneraju.
  • RM50 million will be allocated to Skills Development Fund Corporation (PTPK)
  • Matching grants worth RM20 million will be provided to support TVET courses specially designed to collaborate with the industry.
  • RM30 million will be provided to train more than 3,000 youths from low-income families.
  • Malaysian Technical University Network (MTUN) will start offering graduate courses from 2020 for students who graduate from vocational colleges.
  • Allocation for maintenance of schools to be increased from RM652 million last year to RM735 million in 2020.
  • An allocation of RM783 million will be directed to all schools in Sabah and Sarawak that are in need of refurbishment in 2020.


Boosting economic growth in new economy

  • Special investment incentive packages (up to RM1 billion per year) will be provided for five years to attract Fortune 500 companies and “global unicorns” in the high tech, manufacturing, creative and economic sectors.
  • Special investment incentive packages (up to RM1 billion a year) will be given to local companies for a period of five years that would be able to penetrate the world market.
  • Fourteen One-Stop Digital Improvement Centers will be set up in each state to facilitate access to finance and business capability growth.
  • RM25 million matching grant funds to promote more digital application pilot projects utilising fiber optic and 5G infrastructure.
  • 50% matching grant of up to RM5,000 will be provided to small and medium enterprises to upgrade their digital operations.
  • For Indian community entrepreneurs, the government will provide a loan of RM20 million under the Indian Entrepreneur Development Scheme.
  • RM100 million will be allocated under the Chinese community small industries fund, with an interest of 4%.
  • RM150 million for all entrepreneurship development and skills development programmes by Perbadanan Usahawan Nasional Berhad (PUNB);
  • RM75 million to build bumiputera SME capacity by SMECorp, which includes programmes to enhance marketing, packaging and financial literacy;
  • RM170 million for financing access through Tekun Nasional, SME Bank and Real Estate Investment Berhad (PHB); and
  • RM50 million for entrepreneurship programs under the Economic Affairs Ministry.
  • RM10 million will be allocated to the Malaysian Global Innovation and Creativity Centre (MAGIC) to encourage the development of social enterprises and to support the advancement of socio-economic welfare and community building.



With the revelation of the budget, these changes are aligned with the necessary legislative changes that have been affecting the country’s economic progress for years. The Budget 2020 is part of a long-term plan by the government that strives to restore the country’s fiscal health and the planning will escalate slowly, that includes future planning such as the proposed digital tax coming in 2020. 


What are you looking forward to the highlights of the 2020 budget? Leave us your thoughts on the comment sections below. Head over to Jobstore.com and unveil your next job opportunity.

You Jing is a content writer who writes career and lifestyle contents to inspire job seekers and employers alike on their journey to work-life balance, empowerment and transformation in their career path.

Reach me at youjing@jobstore.com

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