Wage subsidy helps tour firms to retain staff
KOTA KINABALU: The Federal Government’s Wage Subsidy Programme (WSP) has helped tour companies in Sabah alleviate their financial plight that was caused by the Covid-19 pandemic.
Several of the tour companies in Sabah have managed to retain their staff members due to the WSP, which was announced by Prime Minister Tan Sri Muhyiddin Yassin back in March as part of the Prihatin Rakyat Economic Stimulus Package (Prihatin).
The aim of the package was to promote employee retention and reduce layoffs.
Just last month, the Federal Government announced the extension of WSP under the short-term Economic Recovery Plan (Penjana) by another three months.
First Choice Travel and Tours Sdn Bhd, a Sabah tour company, has managed to retain its staff thanks to the WSP initiative.
“When we saw the news about the WSP, we decided to apply through the Social Security Organisation (Socso),” said owner Mary Lai.
“This had helped us retain our staff. The RM1,200 subsidy was for three months – April, May and June. I think we applied for it in April.
“Recently, the government said that they would extend it for another three months,” she added.
She also lamented the severe financial predicament that her company had faced during the past several months.
“It was very bad. We as a travel agent offer inbound and outbound packages. The Covid-19 pandemic started around January during the Chinese New Year.
“Even though the cases started increasing at the end of December, the situation was not that bad yet (at that time). The outbreak in China then took place and the group bookings (from China) were cancelled,” she said.
“Even though we have been allowed to operate on June 9, we have yet to receive any booking. Up till June 20, we have received zero bookings,” added Mary.
Now that her company has received the WSP, she said that she would ‘wait and see’ whether business would go back to normal – whether or not things would slowly pick up.
“At the moment, our company only allows domestic travel. There’s no word on overseas travel just yet. We have to wait until August 31 on a decision on overseas travel.
“Furthermore, we don’t know what’s going to happen in the future. China had recently started its second wave and we are worried.
We don’t know when this will end,” she said.
She said that she is currently waiting for the next phase of the WSP so that she can at least pay for the July salaries.
“I just told my staff to wait and see as there is no business at all at the moment. Nothing. Even domestic flights have now been allowed, people are still ‘takuttakut’ (scared) to travel,” said Mary.
In this regard, she expressed her hope that the government would introduce more initiatives to help the tour companies in the state.
“Yes, they should do more,” she stressed.
She even compared homestay businesses to tour companies as the former had received financial assistance and the latter did not.
“The subsidy alone is not enough,” she said.
Socso chief executive officer, Datuk Seri Dr Mohammed Azman Aziz Mohamad, had previously said that up till June 10, the organisation had received applications from a total of 310,729 employers involving 2.52 million workers.
It is understood that of the total number of applications, 295,269 were approved, involving 2.31 million workers with a total payment of RM4.08 billion.
Sabah Association of Tour and Travel Agents (Satta) president Datuk Seri Winston Liaw also welcomed the measures to assist tourism players and boost domestic travel under the Prihatin and Penjana.
He said the Special Relief Facility (SRF) under Prihatin had allowed travel agencies to ease their cash flow constraints and enabled employers to pay their staff and other expenses.
Liaw, who is also the chairman of Airworld Travel and Tours, said his company had received RM1 million of special financing under the SRF last month.
“The funds will allow us to retain our employees and pay the expenses.”
The SRF, with special financing up to RM1 million, aims to alleviate cash flow problems faced by small and medium enterprises (SMEs) affected by the Covid-19 outbreak.
He said the company may have encountered serious cash flow issues by September or October due to decline in tourism activities.
“With the RM1 million received, we will be able to survive until Chinese New Year next year,” he said.
In addition, Liaw said the six-month moratorium on loan repayments starting April 1 had truly eased the burden of SMEs amid the pandemic.
He hoped that the deferment on loan repayment could be extended for another three to six months.
“This is because the tourism industry may take at least six months to recover after Malaysia opens up our borders to international flights from China, South Korea, Vietnam and Taiwan.”
On the other hand, he said the extension of income tax relief of RM1,000 for domestic tourism expenses to December 31, 2021 was an effective measure to stimulate the tourism industry.
Although the mechanism was still unclear, he said the measure would benefit people with taxable income, as they could enjoy tax relief when travelling domestically.
“I believe this will help stimulate the tourism industry if a person can enjoy a reduction in his or her income tax payment from, say RM10,000 to RM9,000 with the travel expenses,” he said.
He hoped that the government would release details of the mechanism soon so that travel agencies could incorporate this into their products.
Liaw continued to say that the tourism tax and service tax exemption for accommodation until 30 June 2021 would boost travel when the Covid-19 pandemic had subsided.
He said five-star resorts had started introducing cheaper rates to attract customers.
In fact, he said a five-star resort in Kota Kinabalu had reduced its room rate from RM900 per night previously to around RM300 per night.
“The tourism tax, which is fixed at RM10 per room per night, is negligible when the room rate was RM900 per night.
“But it does comprise a more significant percentage when the room rate has been reduced to RM300 per night,” he said.
Even though the current demand for travel is weak, Liaw believed that the tourism tax and service tax exemption would help reduce the prices of tour packages in the long run.
Meanwhile, he said the wage subsidy programme, a measure taken by the government to prevent mass layoffs, would have a positive impact on small companies.