PETALING JAYA: Two economists have defended the government’s stimulus budget against criticism from business groups and said the package is meant to meet the needs of the people first.
Academy of Sains Malaysia fellow Madeline Berma said the stimulus package was aimed at ensuring the welfare of the people and small businesses.
“The amount, RM250 billion, is a welcome surprise. The package is people and small business-centric in the sense that it aims to ease cash flow and credit concerns.
“The government has to look after the smaller people first,” she said, adding the stimulus package was very comprehensive as it covered everyone from children to the elderly to the employed and unemployed be it rural or urban areas.
She said she believes another stimulus package will be announced if the Covid-19 crises continues, and the next round of stimulus will probably cater to the macro economy.
On Friday, Prime Minister Muhyiddin Yassin announced a stimulus package with a total value of RM250 billion.
Criticism has come from business groups such as the Malaysian Association of Tour and Travel Agents (Matta), the Malaysian Employers Federation (MEF), Federation of Malaysian Manufacturers (FMM) and the Malaysia Retailers Association.
The organisations said the stimulus package failed to deal with the sustainability of their businesses, and retaining jobs.
Barjoyai Bardai of Universiti Tun Abdul Razak said people had to realise the aim of the stimulus package was to ensure the health ministry could perform at an optimum level through increased allocations and to make sure there is food on the table for the people.
“The economic recovery has not really been addressed because the more important thing now is the needs of Malaysian families.”
The time for economic recovery measures, he said, was likely to come only after the Covid-19 threat was gone.
“The question is how will it be funded.
“I think Goods and Services Tax will make a comeback, perhaps other taxes like a capital gains tax could be introduced,” he said. Increased government borrowings were another alternative.
Denison Jayasooria, a former practice professor in public advocacy with the Institute of Ethnic Studies at Universiti Kebangsaan Malaysia, said the stimulus package was a great effort as direct cash handouts were critical for those in the bottom 40 (B40), though more details on its execution were needed.
“The concerns of SMEs must also be taken more seriously due to the long term impact for recovery.”
Jayasooria, who has researched urban poverty for over 25 years, says the stimulus package was designed to meet many grassroots concerns.
He said the legitimacy of the government was not the concern as they were doing a good job and the finance minister was instilling confidence that even with increases in the national debt the economy could nonetheless recover in the long run.
However, stronger consultative leadership was needed. Putrajaya could not do it alone, and companies which have made profits in the past two to five years must share in the burden.
All stakeholders, he said, must work together, be it from the government, private sector or NGOs.
“So far a bipartisan political mobilisation has not taken place.”
He said the Covid-19 crisis could be a good opportunity for the nation to recover and rebuild.