Budget 2023: Govt should develop gig economy framework, says MDEC

Digital Adoption Department, Ecosystem Development Division director Mohd Redzuan Affandi Abdul Rahim said MDEC hopes that this would enable experienced gig workers and new graduates entering the field to better understand how to work online.

"MDEC also hopes that the government will provide tax incentives to encourage local businesses to use the energy of 'digital freelancers' from within the country instead of from abroad," he told Bernama when asked about MDEC's hopes for Budget 2023 which will be tabled on Oct 7, 2022.

Mohd Redzuan said incentives for users also need to be created to encourage the use of local platforms such as BungkusIt, MatDespatch, PantangPlus, MrWireman, GoCoach and various other platforms.

He said MDEC sees the gig economy model as a form that enables the inclusive participation of the people in the digital economy in addition to being a contributor and a new engine of economic generation if implemented appropriately.

"MDEC also wants the government to intensify the efforts that we are currently implementing, especially in terms of standards and verifying the gig platform to ensure that individuals who want to participate in this economic model are protected from job scams.

"This includes ensuring that all platforms that wish to offer services or operate in Malaysia must be registered with the government through MDEC to be verified, especially in terms of personal data management," said Mohd Redzuan.

He said the government through financial institutions can also help the development of gig workers through a new method to identify credit scores to enable them to get microcredit financing to expand their business.

MDEC is the agency responsible for implementing several programmes that promote and encourage the use of the gig economy or sharing economy model since 2015, such as the eRezeki and Global Online Workforce (GLOW) programmes.

Based on programme implementation data, it is estimated that there are as many as 1.12 million individuals involved in the gig economy sphere, taking the opportunity to generate income either as a supplementary income or as the main income.

Mohd Redzuan said that based on MDEC programme data from 2016 until June 2020, gig workers earned a total of RM2.86 billion during that period.

Until 2021, a total of 137 platforms have been confirmed and became strategic partners of the programme under MDEC with the overall market size for this industry in Malaysia estimated to be worth at least RM1.61 billion.

"MDEC estimates the growth of the gig economy, especially from the development aspect of local platforms, will continue to grow from approximately RM371.4 million in 2021 to at least RM650 million in 2025," said Mohd Redzuan.

Meanwhile, Pickupp country manager Navin Kandapper said since the gig economy enables people to have earning opportunities based on their personal choice and availability, it hopes that Budget 2023 would create awareness of the gig economy as a flexible opportunity that brings value to the economy as a whole.

"We also wish that the government gives more support in the form of initiatives such as workshops for continuous skill development to create awareness for earning opportunities or supplemental earnings based on their availability," he said.

The tech logistics startup said technology helps by providing a platform to manage and support independent agents by providing clear earnings awareness, productivity tracking, and automating payments and feedback.

"As a society, we recognise that gig economy participants fulfil a crucial role in a fast-changing society that has adopted e-commerce, food delivery, and ad-hoc transport solutions," he said.

Airasia Super App chief executive officer Amanda Woo said as the gig economy is gradually becoming more attractive, gig workers' welfare contributions such as the Employees Provident Fund (EPF) and Social Security Organisation (Socso) are becoming more important and should be highlighted in Budget 2023.

She said that was why AirAsia recently announced full-time employment to all gig workers including its e-hailing drivers and delivery riders.

"There are 53,000 registered Airasia ride drivers in Malaysia. With the recent full-time employment announcement, we are targeting to have more full-time Allstars drivers by the end of the financial year to meet the increasing demand as all economic sectors have been reopened," she said.

The full-time Allstars gig workers will receive basic income (RM2,500), fuel benefit (RM1,000), 90 per cent off AirAsia flight (self+family), medical coverage (self+family), EPF contribution by AirAsia, and Socso coverage.