RM600 wage subsidy for workers insufficient, says SME Sarawak

Jordan C S Ong

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KUCHING, June 29: SME Association of Sarawak (SME Sarawak) appreciates the federal government’s intention to assist small and medium enterprises (SMEs) with workers’ salaries through the recently announced People’s Protection and Economic Recovery Package (Pemulih) but opined that the RM600 wage subsidy per worker is insufficient.

Its secretary-general Jordan C S Ong made this comment when referring to the extended Wage Subsidy Scheme (PSU 4.0) with assistance of RM600 per worker for four months under the Pemulih stimulus package which would benefit more than 2.5 million workers.

“We appreciate the government’s intention to assist SMEs on payrolls, however the RM600 subsidy is insufficient and is no longer relevant at this stage as most businesses are already at the edge of closing down due to the prolonged lockdown.

“It was reported last year that 1,150 businesses wound up in Sarawak despite having received the assistance from March to Oct 30.

“Even though the salary capping of RM4,000 has been removed, the RM600 subsidy is inconsequential for SMEs that have been struggling to sustain rising expenses while operations are still at a standstill.

“Take for example an enterprise with 10 employees receiving average salary of RM4,000. The total payroll that the company need is RM34,000 even after deducting the RM600 subsidy. It is still very heavy for most enterprises to retain employees and maintain salaries,” he elaborated in a statement today.

Ong also suggested the government should subsidise salary payout using a percentage of their salary as an alternative.

“Fifty per cent of the gross monthly wages with no salary ceiling will be a good measure for business owners to hold on to their workers. The percentage should depend on the business sectors and higher percentage allocated for industries which are worst hit include hotel, restaurant, entertainment, health and wellness and operators of events and exhibitions,” he commented.

He also mentioned that Singapore is offering 25 per cent to 75 per cent wage subsidies to all its local workers while England is paying 80 per cent of the salary if companies kept workers on their payroll rather than laying them off.

“This is a critical moment for small businesses. If we lose too many of them, it will create a longer, slower economic recovery. Government must be more daring and aggressive in providing all the support to save jobs and protect livelihoods,” he added. — DayakDaily