KUCHING, June 2: The RM40 billion Pemerkasa Plus special aid package announced by the Federal government has limited impact on the economy as there is only RM5 billion of direct fiscal injection in cash assistance as compared to the first Prihatin package of RM11 billion.
Highlighting this, SME Association of Sarawak is of the view that the new Pemerkasa Plus is insufficient to restore the damage done to the economy although it gives small and medium enterprises (SMEs) some relief from the full lockdown impact.
“There is nothing new as most of the measures had been announced previously. It is just a matter of increasing the allocation amount and extending the current aid for a certain period of time.
“For example, the extension of exemptions on vehicles sales tax and property stamp duty will boost the segment but at a reduced rate,” the Association emphasised in a statement today.
Nonetheless, the Association welcomes the initiatives under Pemerkasa Plus for Wages Subsidy Programme (WSP) for one month, the three-month automatic loan moratorium or 50 per cent reduction in loan instalment repayment as well as the additional RM2 billion allocated for the Targeted Relief and Recovery Facilities (TRRF) by Bank Negara Malaysia (BNM) for SMEs.
On the Wages Subsidy Programme particularly, the Association suggested that it be extended to three months instead of only one month which was insignificant as most SMEs are paying full salary to their employees.
“The one month subsidy only applies to remuneration of RM4,000 and below but specialised groups like engineers and organisation’s management level are above the classified pay segment.
“Most SMEs are facing difficulties in maintaining them and laying them off is the only regretful options,” the Association pointed out in reference to worst hit businesses such as fitness centres, beauty salons and in particular entertainment outlets, massage centres and cinemas which were not permitted to operate even before Movement Control Order (MCO).
However, the Association noted that the cash handouts for lower income B40 groups and SMEs will have a high impact on the consumption market as the opening of business sectors after the two-weeks full MCO will ensure the rebounce of the economy.
“Contrarily, the government should provide more assistance to middle-income group M40 as they are also affected by the latest MCO. According to a survey, most M40 groups will be downgraded to B40 in this round of lockdown,” the Association highlighted.
Regardless, the Association believes that Malaysia’s economy is on the recovery path despite the limited stimulus package and downsides of two-weeks full lockdown, noting that the Gross Domestic Product (GDP) growth projection shall be maintained at slightly more than 4 per cent for 2021.
“Hence, we shall all work together to contain the virus to make sure there is no further FMCO in the future particularly in 2021 while the government is accelerating the immunisation programme. That is the best way to revive the economy.” — DayakDaily
