Stimulus package: SMIs in dilemma

SPEEDY response to the people’s predicament, that’s how we can sum up the People’s Stimulus Package or PRIHATIN announced by the government recently.

It is hoped that PRIHATIN will be able to ease the burden of the rakyat, notably the B40 and M40 who were much affected by the COVID-19 pandemic and the Movement Control Order or MCO.

Those who qualify irrespective of ‘Makcik Kiah’, housewives, petty traders, planters, fishermen, civil and private servants and students can access,, and, to check their status to receive the ‘Bantuan Prihatin Nasional’ (BPN). Don’t hesitate or feel shy to get such aid if you are qualified.

To BPN facilitators, we should simplify the process without red tapes, as envisaged by Prophet Muhammad SAW: “Simplify and not complicate, give them good news and dont make them go away” (Hadith related by Bukhari & Abu Muslim/Riyadhus Solihin 627).

The Small and Medium-scaled Industries (SMIs) too are benefitting from by PRIHATIN. According to Finance Minister: “Various steps are taken to ensure all affected individuals and SMIs get some supports. He added that “as an incentive for the SMIs to resume operation, protects employment and encourage domestic investments, local banks are also taking measures to support them.”

It is undeniable that PRIHATIN had issued loans to SMIs and corporate sector, hence a moratorium on loan servicing for six months is given. However, some SMI associations have spoken up and gave feedback to ease off the employers’ burdens.

Representatives of Dewan Perniagaan Melayu Malaysia (DPMM), Majlis Tindakan Ekonomi Melayu (MTEM), Persatuan Peruncit Malaysia (MRA), Pertubuhan Peruncit Bumiputera (BRO), Persatuan Arkitek Perunding Malaysia (ACAM), Persatuan Pelancongan dan Pengembaraan Malaysia (MATTA) and Persatuan Syarikat Pengendalian Pelancongan Bumiputera Malaysia (BUMITRA) suggested some measures that could help the SMIs in dilemma and to avoid close shop due the world’s economic downturn.

The International Monetary Fund (IMF) president Kristalina Georgieva had said: “The depth of shrinking economy and its speedy recovery depends much on how fast Coronavirus pandemic is contained, and how strong we are to act on the monetary and fiscal policies,” adding that “it is expected the global economy will shrink this year and recovers in 2021.”

Three dilemmas facing the SMIs are: How their business could sustain until 2021? How are they going to pay wages and salaries? How are they going to service the rentals and utility charges?

For the record in 2018, local SMIs contributed 38.3 per cent or RM521.7 billion to the Gross Domestic Product or GDP. According to SME Corp Malaysia, latest data by the Statistic Department showed that SMI sector chalked a 6.2 per cent increase.

Services and manufacturing continued to be the major contributor at 82.4 per cent in 2018. Hence, the significant of the SMIs cannot go unnoticed.

Should problems of the SMIs are not resolved during MCO or post-MCO, will the country still able to meet the 41 per cent contribution to the GDP in 2020 which is in tandem with our National Entrepreneurship Policy 2030 (DKN 2030)?

UMNO, Barisan Nasional and Muafakat Nasional therefore urge the respective ministry and agency related to the SMIs, particularly SME Corp as the central implementation agency involving 17 ministries and more than 60 agencies to continue supporting the SMIs in this crucial time.

Regular meetings are crucial in getting feedback from associations representing the SMIs. Economic experts, including MIER (Malaysian Institute of Economic Research) expected between 1 and 2 million workforce will be laid down in the next few months if issues hovering the SMIs are not attended to immediately.

After reading statements by some SMI associations in stimulating the industries for short and medium terms, I would like to suggest few measures for the government’s evaluation, among which are:

  1. To consider waiving off compulsory contribution to the Employees’ Provident Fund (EPF) and SOCSO at least for six months immediately.
  2. Allowing them to postpone deferred income-tax payments to LHDN, Customs and other taxes for at least 6 months, besides reduced taxes on revenue, sales tax and duty stamp throughout 2020. This policy is being carried out in many countries.
  3. Simplify fund withdrawal for SMIs already approved or under evaluation because during the MCO, smaller companies need funding more than the big ones.
  4. Government’s provision for employers not lay off workers as stipulated in WORKERS ACT under Jabatan Tenaga Rakyat is in fact a dilemma for the SMIs. A more practical method must be outlined to create a ‘win-win’ situation between employers and workers.

In measures to lessen the impact of the economic slump, immediate steps must be regulated to ease off predicaments of the SMIs as it contributes handsomely to the national GDP. Immediate government’s action will surely able to reduce their burden.

I am convinced our Finance Minister will look into the proposals and issues put forward by the SMIs, as he once said:

“The Finance Ministry and its agencies will continue working with the financial and investment sectors in ensuring the smooth implementation of PRE2020 and the prudent steps to support and aid current needs of the businesses and the people.”

Together we pray that all efforts by the government meet its objectives.


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