SURVIVE the Covid-19 pandemic – this is the main concern of industries big and small.
At a time when business is slow and the need to comply with strict SOPs has stifled operations, staying afloat is all that matters.
To do so, businesses count on the Government and its many incentives and assistance plans to tide over these challenging times.
The latest National People’s Well-Being and Economic Recovery Package (Pemulih) worth RM150bil announced on June 15 is to help people and businesses through Phases Two, Three and Four of the National Recovery Plan.
(The country will move on to Phase Two of the National Recovery Plan when three indicators are met: the number of daily Covid-19 cases drops to below 4,000; the rate of bed usage in hospital intensive care units is at a moderate level; and 10% of the population have received two doses of the vaccine.)
Prior to Pemulih, the Government had announced throughout 2020 and 2021 seven economic packages worth RM380bil, and these did not include the RM322.5bil allocated under Budget 2021.
All these incentives, financial assistance and loan moratoriums help to pay the fixed overheads and keep many small and medium enterprises (SMEs) from shutting down altogether.
Under the Program Strategik Memperkasa Rakyat dan Ekonomi Tambahan (Pemerkasa Plus) announced on May 31, 20 million people and 2.4 million businesses will receive assistance during Phase One of the National Recovery Plan.
In welcoming the stimulus packages, Federation of Manufacturers Malaysia President Tan Sri Soh Thian Lai said that such aid is important to prime the economy.
“This must include direct fiscal injection as well as specific measures to help reduce the cost impact of the affected businesses,” he said.
Direct financial assistance under Pemerkasa Plus in the form of a one-month extension of the Wage Subsidy Programme 3.0 for local workers; a three-month automatic loan moratorium for individuals and SMEs; and a one-month Human Resources Development levy exemption are lifelines for most manufacturing companies, he added.
Soh cautioned that such assistance would not sustain the industry over an extended period of lockdown and post-lockdown.
Thus, more assistance such as Pemulih is needed as relief fund to shore up recovery and prevent the country from going into recession, he added.
Associated Chinese Chambers of Commerce and Industry of Malaysia’s SME committee chairman Koong Lin Loong said Pemulih covers all sectors, people and the economy, as the six-month automatic loan moratorium is for all borrowers regardless whether they are from the B40, M40 or T20 groups or are micro-entrepreneurs.
“There is no qualification requirement. Borrowers only need to apply and approval will be given automatically by the banks.
“This is what many people, regardless of income group, have been hoping for as they have run out of savings while their income has been affected,” he said.
Koong lauded the two-month exemption of automatic payment for Human Resource Development levy for employers who are not able to operate during the lockdown.
“This will certainly free up the cash flow of many companies,” he said.
He commended the four-month extension of the Wage Subsidy Programme 4.0, whereby the Government will support up to 500 workers per employer with an assistance of RM600 per worker for four months.
Malaysian Consortium of Mid-Tier Companies president Callum Chen gave the thumbs-up to the increase in financing guarantee schemes by another RM10bil to RM36.5bil for SMEs.
“Such schemes will see more business loans being guaranteed by the Finance Ministry’s Syarikat Jaminan Pembiayaan Perniagaan Bhd (SJPP) that will see improved company access to financing, as it encourages banks to take on more risk.
“With due diligence checks by both banks and SJPP, the risk of loans becoming non-performing is relatively low and we have more money in the market to spur the economy,” said Chen.
