Permai’s wage subsidy limitations, moratorium for bank loans should be reviewed
KUALA LUMPUR: While the initiatives introduced in the Perlindungan Ekonomi dan Rakyat Malaysia (Permai) Assistance Package has been lauded as a comprehensive package, most businesses hope the government will consider not limiting the Wage Subsidy Program to only those under the Movement Control Order (MCO) zones.
In addition, the automatic moratorium for bank loans have been requested by many business sectors and the working population.
“Most of the assistance expected are in Permai. However, the request from most businesses are for wages subsidy and automatic moratorium for bank loans,” Sarawak Housing and Real Estate Developement Kuching branch chief Datuk Sim Kiang Chiok commented to The Borneo Post.
“The wage subsidy is disappointing in that it only caters for MCO zones and for a month only. My hope is that it can be extended for all states and for at least three months.
“This will assist in reducing unemployment and help businesses to maintain their production capacities when the pandemic is over.”
This sentiment was echoed by owners of local co-working space and meeting space My Placa, who said assistance should also be extended to those within the Conditional MCO (CMCO) region.
“The assistance package is providing great assistance to the Bottom 40 per cent (B40) group and the MCO regions,” the group said to The Borneo Post.
“It will be of greater benefit if the assistance can reach the other groups and CMCO regions as they are also impacted greatly by the pandemic.”
Sim recalled that the MCO 2.0 has been imposed on all of Malaysia except for Sarawak. Even by allowing five essential economic sectors to operate with strict standard operating procedures (SOP) and limited working hours, he said, it will still have negative spinoff to the rest of the country.
On automatic moratorium for bank loans, he highlighted that it has been requested by many business sectors and the working population.
“Under Permai, the government has not instructed the banks for automatic moratorium but left it to the respective banks to deal with individual applications which is disappointing.
“Automatic moratorium for all bank loans will ease and assist each household and business to help in their cash flow in this low business environment due to the lockdown, SOP and shorter working hours.
“Also, when loans are being repaid to the bank, it is very difficult to reapply for new loan as most bank view this period in time as very risky to lend.”
Sim stressed that in giving automatic moratorium assists the business and household, it allows them breathing space to survive through this unprecedented period without any bank default and subsequent legal foreclosure and bankruptcy which will have much negative impact to the banking system and overall economy.
“It also help business working capital when loan repayment can be defered and there is no loss to the bank as all interest are still chargeable.
“We can even say that even during this pandemic, banks are still very profitable and to extend automatic moratorium will be no loss to them but instead preserve their customers base and business relationship.”