Follow and subscribe to DayakDaily on Telegram for faster news updates.
KUCHING, March 31: DAP Sarawak chairman Chong Chieng Jen has suggested that the Sarawak government utilise part of its RM31 billion reserve as a lifeline for small and medium enterprises (SMEs) in Sarawak by subsidising 50 per cent of wages of all employees of businesses in the state adversely affected by the Covid-19 pandemic.
“This is to help businesses to sustain and minimise retrenchment. We estimate that with proper strategy and implementation of such wage subsidy, an approximate of RM5 billion will be more than sufficient. The Sarawak government has a reserve of RM31 billion.
“Reserves are meant for rainy days. We are now in a mega storm. This is the time to utilise the reserve fund to help our people. DAP (Democratic Action Party) Sarawak will definitely support the bill to utilise such funds when tabled in Dewan Undangan Negeri (DUN),” he asserted in a statement issued today.
Chong criticised the economic stimulus package announced by Prime Minister Tan Sri Muhyiddin Yassin as a huge disappointment for the SMEs in Malaysia which had generated much anger amongst the SMEs.
SMEs, he pointed out, have to continue paying full salaries for employees, yet the government was giving nothing to compensate the losses suffered by SMEs due to the Movement Control Order (MCO) and the dire state of the economy resulting from the Covid-19 pandemic.
“Even the meagre RM600 subsidy for employees is premised on the condition that the employer suffers more than a 50 per cent drop in revenue since January 2020 and it only covers those employees whose monthly salaries are less than RM4,000.
“Furthermore, when all economists are expecting the Covid-19-triggered economic recession will last up till the end of the year, this wage subsidy will only be provided for a period of three months,” he added.
In the immediate wake of the stimulus package announcement, Chong noted that the Malaysia SME Association president Datuk Michael Kang predicted that at least 50 per cent of the SMEs in the country will close down and four million employees will lose their jobs.
“If that is not enough to sound the alarm for the government, the Malaysian Institute of Economic Research (MIER) has also predicted approximately 2.4 million will lose their jobs due to the present recession triggered by the Covid-19 pandemic,” he added.
Chong stressed that the contribution of SMEs to the country’s economy should never be underestimated as the sector contributed 38 per cent of the national Gross Domestic Product (GDP) in 2018, or RM521.7 billion out of the national GDP of RM1,361.5 billion.
“SMEs are the backbone of our country’s economy. The effect of the SMEs closing down will not only be felt within the SME sector but will severely impact the other non-SME sectors.
“If SMEs fall, the economy of the whole country will fall. That is a fact that the government must always keep in mind when formulating economic stimulus policies,” he added.
Chong noted that the Australian government is now proposing a fortnightly wage subsidy of AUD1,500 for six million workers while the UK government will pay up to 80 per cent of the salaries of workers if companies keep them on their payroll, rather than lay them off as the economy crashes.
“The extraordinary payments will be worth up to a maximum of £2,500 per month, just above the median income. (Malaysia’s median salary for 2019 is RM2,415),” he explained.
Therefore, with the present stimulus package, Chong opined that both the federal and state governments were literally letting the SMEs fend for themselves in this unprecedented health and economic crisis of mankind.
“If the SMEs fall (which will be a certainty without any government assistance), there will be a recession, high unemployment rate and high inflation (due to massive loss of production). This will in turn lead to social disorder,” he added.
If the federal government would not review its stimulus package to give assistance to Sarawak’s SMEs, Chong asserted DAP Sarawak thus proposed that at least, the state government should inject funds to help Sarawak SMEs by subsidising 50 per cent of all the employees’ wages in the state for the next six months. — DayakDaily