KUALA LUMPUR — Industries greeted the RM250 billion stimulus unveiled by Prime Minister Tan Sri Muhyiddin Yassin yesterday with reservation, with most saying the package will do little to help struggling small businesses retain jobs.
The criticism came from sectors of the economy most hit by the Covid-19 pandemic — small and medium businesses (SMEs), which includes the tourism industry, who over the last few months has warned repeatedly that its workers were facing massive layoffs should help not arrive.
Employers suggested no incentive to prevent them from retrenching workers was made available apart from a RM600 wage subsidy for each worker employed by businesses whose profits have dropped by half.
The tourism sector gave a similar response. The Malaysian Association of Tour and Travel Agents (Matta), the majority of them small businesses, said the package “failed” to help with employment retention.
“We are thankful and fully appreciative that the rakyat, especially the hardcore poor, have been given a temporary lifeline,” Matta President Datuk Tan Kok Liang said in a statement.
“However, the package has failed to meet the needs of tourism enterprises, particularly SMEs and does not address the problem of staff retention,” he added.
“What will happen after the handouts are fully given out by May when employees find themselves out of a job because the businesses they used to work for have been forced to close shop?”
Muhyiddin unveiled the third round of stimulus worth RM250 billion that he dubbed “Prihatin”, meaning “care” in English, yesterday amid anticipation that workers and SMEs will top the priority list, as concern mounts of potential job losses caused by the Covid-19 economic fallout.
Under the package, SMEs will receive over RM10 billion in loan and tax payment freezes, credit and guarantees, which the prime minister said ensure small businesses receive financial support needed to ease cash flow.
The Perikatan Nasional administration also said it would subsidise RM600 in wages for badly affected companies to help them retain workers earning less than RM4,000 a month. The subsidy will be paid until June.
While businesses have welcomed the measures, many said it is not enough to stem the tide.
Warning that half the industry may soon collapse, SME Association president Datuk Michael Kang said adding credit for small businesses made little sense.
“The stimulus package is good for the rakyat, but not for businesses. They will collapse as there is nothing much that would benefit the SMEs,” The Star quoted him as saying.
“Why would SMEs take loans to pay salaries and rental when they don’t have any income to sustain their businesses?” He added.
“I received immediate response from the members, and they are all very unhappy.” MALAY MAIL
Anwar on stimulus package: What happens when the borrowed money runs out?
PKR president Anwar Ibrahim has cautioned that the government is currently relying on borrowed funds for its new people-centric economic stimulus (Prihatin) package and questioned what will happen once the money runs out.
He, however, also stressed that he does support initiatives in the Prihatin package that helps the people, especially those in the B40 income group.
He claimed that around RM100 billion of the RM250 billion injected into the stimulus package comes from bank loans, another RM40 billion from the Employees’ Provident Fund (EPF), some RM60 billion from the Human Resources Fund and RM50 billion from Danajamin Nasional Bhd which is partly owned by Ministry of Finance Inc (MOF Inc).
“So if we gather all of that, it is RM250 billion, but we go back to our main question which is the RM22 billion allocated.
“How do we push the economy, let it move? For two months, we can stay afloat through loans,” Anwar said in a Facebook video which was live-streamed around 5.30pm today.
He also stressed the importance of small and medium enterprises (SMEs) in Malaysia as a decline to SMEs would also affect the country’s productivity and unemployment rate.
Debate in parliament
Anwar also urged for there to be a debate in parliament on the supplementary budget which will be necessary to fund the economic stimulus package meant to combat the sudden Covid-19 pandemic.
“In a country with the parliamentary democracy system, parliament must be called into session and debate (on this).
“We support things which are good. There were good excerpts in the speech last night.
“I support it, but we have to debate it because all elected representatives in parliament are responsible for giving their thoughts on the economy for our future,” he said.
Anwar also cautioned against a sloppy implementation of the stimulus package.
He questioned how much of the money would be stolen by middlemen when channelling these funds to the rakyat.
This is another reason why it is so important to debate this matter in parliament, he stressed.
“Billions of ringgit will disappear because we did not follow a responsible and transparent process.
“That is why I think a debate in parliament is very urgent and should be held immediately,” he said.
Prime Minister Muhyiddin Yassin had announced the Prihatin package yesterday, on top of the economic stimulus package already announced by then-interim prime minister Dr Mahathir Mohamad on Feb 27.
The new Prihatin package is meant partly to mitigate the effects of the movement control order (MCO) which is in effect from March 18 to April 14.