No benefits for SMEs in stimulus package – LDP Youth leader
KOTA KINABALU: The economic stimulus package announced by Prime Minister Tan Sri Muhyiddin Yassin recently has not delivered tangible benefits to Small and Medium Enterprises (SMEs) as employers are still burdened with the issue of paying their employees' salaries.
Liberal Democratic Party (LDP) Central Youth Movement leader Sim Fui said the stimulus package indeed ensured employees were well taken care of by providing various subsidies, but employers did not benefit from the initiatives introduced.
He said more than 90 percent of businesses in the country were categorized as Small and Medium Enterprises (SMEs), which contributed RM521.7 billion to the national Gross Domestic Product (GDP) in 2018.
In addition, he said SMEs employed 70 percent of the workforce nationwide that was equivalent to 5.7 million jobs.
“Under the new policy, employers whose businesses are suspended due to Covid-19 are not allowed to lay off their workers.
“Without assistance from the government, how are SMEs going to overcome this difficult time?”
Sim added that SMEs would need at least six months to recover when the pandemic has subsided.
Hence, he suggested that the government help employers by bearing 50 percent of the wages.
“The government could disburse the amount directly to employers based on the Employees' Provident Fund (EPF) records to eliminate the application process.”
At the same time, Sim proposed to the government to have video conferencing with representatives from SMEs to implement measures that ensure employers could sustain their business.
“It has been speculated that at least half of the companies are facing closure and the ultimate victims would be employees.
“The government should take employers' grievances seriously to prevent a surge in unemployment.”
The Federal Government has introduced a Wage Subsidy Programme, whereby RM600 will be channelled to each employee with a salary of less than RM4,000 per month for a period of three months and whose employers experienced a 50 percent drop in income since January 1.
He said the programme could only help employers to a certain extent.
“However, will the programme still be available for companies that submit their report on the 50 percent loss in income during their income tax filing the following year? The businesses might not have sustained that long.”
He also wondered how soon the RM600 wage subsidy could be disbursed.
“The wage subsidy is little help to companies which employ dozens or hundreds of employees.”
Sim reminded the government that the subsidy came from taxpayers' money.
“If SMEs could not sustain and close shop, where would the government get money from to give to the people?”
He said his concern was not unfounded. According to the Malaysian Institute of Economic Research, an estimated 2.4 million Malaysians might be out of a job due to closures of SMEs and corporates.
Sim pointed out that the second economic stimulus package was good news to the general public and civil servants who would be receiving financial aid, but the government has failed to address the pressing issues of SMEs and employers, who are the pillars of the nation's economy.
He also said that only 0.04 percent of the total allocation under the stimulus package was provided for protective equipment and medical supplies, which was grossly insufficient.
“There should be more allocation for Covid-19 because the pandemic is causing economic recession in our country.
“Allocating merely 0.04 percent of the total allocation for the fight against the pandemic was far too little.”