PETALING JAYA: Should government agencies and essential goods companies move to the periphery of urban areas to boost economic conditions in affordable housing?

Jason SW Loh, head of social, legal and human rights research at think tank Emir Research, thinks so.

“To foster productivity and effective deployment of human resources, it is a good idea to disperse and reassign civil servants further from the urban area,” he said.

“It’s not necessarily about moving to another neighborhood or state, but about reconfiguring the urban setting to bring it closer to the ‘market’, which doesn’t have to be primarily based in the central business district.

“The relocation or establishment of new government operating sites such as Urban Transformation Centers (UTCs) and government compounds could be based on demographic surveys, urban geographic mapping, data analysis, etc. “

Loh added that the move would also reduce pressure on traffic and help reduce congestion in urban centers.

He also said that “refocusing” government operations on “outlying areas” would revitalize or add value to surrounding areas that can be incorporated into new townships or developments.

However, Loh warned that there is a risk that “outside areas” will become more expensive for lower-income groups.

“To solve this problem, affordable housing (rental and owner) should be built by the government. Affordable housing should be self-contained, with not only play areas and community halls in place, but also co-op and food courts and (local) hypermarkets easily accessible to officials and UTC and resort employees government,” he said.

“This would provide business, employment and income opportunities for residents of affordable housing developments. At the same time, commuter connectivity should also be ensured by having transit-oriented development that would meet the needs of those living outside the area, such as LRT or MRT stations and malls. commercial.

On the question of whether tax incentives should be provided to encourage essential goods businesses to relocate, Loh said that one of the most important tax or tax or business incentives for a business is usually the electricity bill.

“Indeed, an electricity rebate or lower tariffs can act as a tax reduction for businesses. It would also promote more efficient electricity deployment by redirecting excess supply to areas outside the Klang Valley. The central region, which is home to barely a third of the peninsula’s total population, accounts for 43% of electricity demand,” he said.

Additionally, Loh suggested introducing a lower chargeable corporation tax – between 18% and 20% across the board.

“For small and medium-sized businesses, tax reductions under the pre-existing marginal rate schedule could be lowered to 15% for the first RM600,000 payable. The corporate tax cut should not be permanent, but should be reviewed after two to three years.

Meanwhile, Universiti Malaya Asia-Europe Institute economics professor Dr. Rajah Rasiah said quadruple helix committees set up by the government should ensure that these houses are indeed affordable.

“Once this is clear, providing affordable transport and access to affordable essentials can help avoid problems. Since oil and gas are among essential goods, which also often face volatile price fluctuations and are a major cause of climate change and global warming, Malaysia should increase the contribution that goes to the National Trust Fund which was launched in 1988,” he said. .

However, Rajah noted that the costs of administering differential tax incentives to encourage essential goods businesses to locate in small towns would likely be too complicated and high, and that linkage value chains involving essential goods would include often non-essential goods.

“Therefore, such a practice could produce a cumbersome system that could become counterproductive. Instead, it may be better to map the value chain and clusters involving essential goods, and seek strategies to reduce production and distribution costs, as well as improve connectivity and coordination between buyers and sellers,” he said.