KUALA LUMPUR: The government has been urged to ensure a soft landing for the people, especially low-wage earners and small businesses, in the wake of the Covid-19 ravage.
Pahang State Tourism, Environment and Plantation Committee chairman Mohd Sharkar Shamsuddin today suggested that the government introduce a ringgit for ringgit scheme for those earning between RM1,100 and RM1,600 basic pay and who were contributing to the Employees Provident Fund (EPF).
The government will pay half the salary and the employers will bear the rest under this scheme. This, he said, would help minimise job losses with the EPF acting as the moderator of the scheme to ensure compliance.
This would ensure job retention, he noted, adding there was a need to prepare a platform whereby more businesses would be able to grow and job creation increased.
Sharkar, who was among the earliest proponents of loan and debt moratoriums by banks, said the stimulus package of the government should be further fine-tuned to actually benefit the people.
He said in terms of loans and interest accrued, a clean payment holiday would be better, as otherwise there would be a domino effect.
“We need to understand that a larger portion of the rakyat live on a month-to-month basis, which means accrual of interest, and the subsequent debt restructuring might have a tailspin effect,” he said in a statement.
“When the monthly commitment increases, the non-performing loans may also increase and domestic spending may dwindle, affecting mostly SMEs, which subsequently affects the governments GDP and effectively paralyses large segments of the rakyat with the banks being the sole beneficiary of this scheme.”
Sharkar said as banks had a considerable cushion during fair weather periods, losing interest over six months was not going to tank any bank in Malaysia.
As for SMEs, he said it was not enough to just restructure existing loans. Banks should soften their lending criteria for certain essential sectors which had a high probability of success, such as grocers, franchise business, pharmacies and medical clinics.
“These are sectors that have been the rakyat’s lifeline in this dark period.”
He said the reintroduction of the goods and service tax (GST), as suggested by some analysts, had to be weighed carefully as it could trigger yet another round of price increases, even if the GST rate was low.
“Instead, introducing smart tools to ensure quick collections by the government and government-linked companies, ranging from sales and service tax to other taxes, would be a sound initiative moving forward and also almost certain to increase the government’s coffers as leakages in the value chain tend to be plugged.
“It would also be great to reinvent and repackage Visit Malaysia Year 2020 to VMY 2021 as tourism is a fixed deposit income and job generator for the country. The latter part of the year should witness an unprecedented push to boost the tourism arrivals in Malaysia in 2021.”
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