Dire Economic Consequences From Generation Endgame Bill

According to Pankaj, even business owners, body corporates, and companies too can be held liable for various offences, which could have severe repercussions on investors’ confidence in doing business in Malaysia.

Dire Economic Consequences From Generation Endgame Bill

KUALA LUMPUR, 29 July 2022 –  The Generation End Game (GEG) bill tabled in Parliament on Wednesday, 27 July 2022, on top of being severely punitive and difficult to enforce, will result in job losses, business closures, severe social impact to the lower income group and potentially impacting the nation’s attractiveness as an investment destination due to restrictive laws. The bill, if passed, may even affect tourism activities due to wide enforcement powers granted under the Control of Tobacco Product and Smoking Bill, which include the criminalisation of an individual as well as business owners.

Pankaj Kumar, Managing Director of DARE, said, “While the bill will only impact those born after 2007 and enforcement will likely start in 2025, it has far more impact on the economy as a whole. The key concern among businesses would be granting authorised officers access to computerised data, which also includes passwords under Section 34(4) of the bill.”

According to Pankaj, even business owners, body corporates, and companies too can be held liable for various offences, which could have severe repercussions on investors’ confidence in doing business in Malaysia.

Pankaj said, “The Generation Endgame bill introduced by Malaysia is punitive and punishing to all. Businesses may find it tough to implement certain provisions of the law and in some cases, it will increase compliance costs as well. At the same time, directors of the companies, similar to what we see under Section 17A of the MACC Act, can be held liable for offences carried out by their employees. Are we equating corruption to smoking-related offences?”

Pankaj added, “With higher compliance costs associated with the bill, businesses may find it tough to remain profitable in already tough economic conditions. Some may have to resort to shutting down their business, leaving thousands of workers jobless. In other cases, businesses may have to resort to cost-cutting measures to ensure overall cost is contained.”

Creating A New Generation Of Criminals
This is an extremely heavy-handed approach, especially for vape users, and will create a new generation of criminals that are penalised for buying or using a substance that is legally permitted to everyone else.

Vape businesses to shut?

Vape and vaping products, which have also been categorised as “smoking” products under the bill, are the biggest casualty. According to Pankaj, as an industry that is proliferating, employing more than 15,000 workers and 3,300 businesses, the bill will see the growth of the vaping industry curtailed as it does not recognise vaping as Tobacco Harm Reduction (THR) tool. “The industry, which has a business volume of more than RM2.7bil and employs mostly ethnic Bumiputras, risk being wiped out if the tobacco bill presented in Parliament is passed.”

Illicit Market Will Grow

“The outright ban on the sale of tobacco products for those born after 2007 will result in the incidence of illicit trade rise from 58.4% as of March 2022 to as high as 61.7%, fuelling the size of the illicit market to jump to RM8.7bil". This will see the government’s loss of revenue from the tobacco industry surpassing the RM5bil mark.”

A softer approach is needed

One day before Malaysia presented the GEG bill in Parliament, New Zealand too presented a similar bill in its Parliament, but the New Zealand version of the GEG bill is a stark contrast to the Malaysian version.

“The key is punitive actions as the Malaysia bill criminalises fenders, but the New Zealand bill does not. In addition, while the Malaysia bill imposes a jail term for the sale of smoking-related products, the New Zealand bill only goes to the extent of punishing offenders with a fine.

“But the most critical differentiator is Malaysia’s move of not recognising vape products or vaping as tobacco harm reduction tools and bans them. In contrast, the New Zealand bill recognises the role played by vaping products in achieving a lower smoking prevalence rate.”

“Overall, the Generation Endgame bill has dire consequences to society, businesses, and Malaysia as a country that criminalises juvenile offenders. The bill ought to be amended to make it friendlier to the general public and recognise that enforcement will be the key – as an area that Malaysia clearly finds it difficult to measure up, as evident by the near 60% illicit trade in the country and growing, while promoting vape and vaping activities should be continued and not curtailed. We must recognise that vaping is a tool for smoking cessation, as proven in countries like the UK and New Zealand,” he concluded.