KOTA KINABALU: Small business owners in Sabah have put forward several proposals of their own in the wake of the government’s economic stimulus package, saying the rescue plan announced by Prime Minister Muhyiddin Yassin last Friday will do little to help them survive.
Entrepreneurs from different sectors told FMT the government should relax the restrictions placed on employers during the movement control order (MCO) period, as monetary assistance was being provided to employees.
They said the government should allow employers to take cost-cutting measures such as temporary reductions in working hours and salaries, or allowing employers to put staff on unpaid leave.
Such measures would be preferable to laying off staff, which the entrepreneurs said would be the result of the current measures.
Noreen Ann, 57, who is in the food and beverage and manufacturing line, said her concern was to ensure her business remained active so that she could keep her employees.
She said the enterprises rehabilitation fund and employment insurance system programmes through the Social Security Organisation (Socso) do not really help homemakers and those who are self-employed.
“This is especially true for those who only hire people on a part-time basis.
“The cost of keeping employees when there is no business activity is even higher as the real issue has not been properly addressed,” she said.
Sabah Employers Association president Yap Cheen Boon had last week criticised the economic stimulus package as falling short of giving the required help to SMEs.
He said the package did not adequately deal with concerns over cash flow and salary costs, and that the RM600 wage subsidy could only buy time for some SMEs.
Sabah alone has about 50,000 SMEs, spread across the sectors of tourism, oil palm, timber, manufacturing and related services.
The stimulus package, aimed at cushioning the impact of the Covid-19 crisis, is worth RM250 billion. Of the amount, RM100 billion is for businesses, including SMEs.
Rose Kolomin, 50, who is into swiftlet farming, shared Noreen’s sentiments about keeping her staff employed but said it was difficult when employers do not get the assistance they want.
Small business owners must receive help first in order for them to get back on track after incurring losses, she said.
Mary Jim, who produces local crafted products with a touch of tradition, said her work involves many of the ethnic communities in Sabah.
These groups, which include single mothers, local homemakers and young people, do not directly benefit from the stimulus package, she said.
“For example, when the MCO was enforced, we had a lot of online orders, with about 50% having paid for the orders. As we could not meet the deadline, they cancelled their orders and asked for refunds.
“I lost a lot of money but my communities are suffering even more as they have lost their source of income on top of the many kinds of personal loans they have to settle,” she said.
Mary, 44, said if the situation persists, it will result in a high rate of bankruptcy coupled with rising unemployment rates.
“Urgent action is needed from the government to look into upskilling or reskilling programmes and allocate some amount of incentives to benefit the unemployed group,” she said.
As a budding start-up in the information technology space, Fadzrul Dullie said the package offers “little in way of assistance”.
“Start-ups by nature are underfunded, lack resources and require people to function.
“Quick and easy access to funding should be initiated which may include grants or good faith loans in order for us to continue creating and innovating,” said the 40-year-old.
Azizul Julrim, 32, who is in agro tourism, questioned how many start-ups and micro enterprises would qualify for loans.
“Start-ups will collapse. Hence, incentives such as one-off grants should be considered to cover more than 4,800 start-ups. They involve people below the age of 40 who have lost their income,” he said.
Cosmetic manufacturer Zaharinah Masair, 31, said although business had come to a standstill, operation costs remained.
She said she had no financial capability to sustain her business for the next two months, adding that working capital is urgently needed.
Salina Ali, who runs a beauty academy, proposed that the government allow withdrawals from Account 1 of the Employees Provident Fund (EPF) up to a maximum of RM50,000 as business capital.
“I believe this can help us sustain our businesses,” said the 50-year-old.
Anne Antah, 45, who is in manufacturing, said employers should be exempted from making EPF payments for at least six months.
“We need time to recover and we expect our income will not be as usual (after the MCO is lifted). We won’t terminate or give unpaid leave, but at least we expect a reduction in our contributions to continue operating.
“But even then, we are still not sure if we can recover,” she said.
Other suggestions that they believe could help small businesses are:
- All commercial electricity bills be cut by half for the next three months.
- Companies allowed to retain 10% of sales and services tax payable for the next 12 months.
- Moratorium of interest payments for six months.
- Employer’s share of EPF to be borne by the government for six months.
- Employer’s share of Socso payments to be borne by the government for six months.
- Property tax to be cut in half for the 2020-2021 financial year for all commercial properties.
- A 50% subsidy on rental for business premises on private property.
- Tax refund and waiver for 2020.
CLICK HERE FOR THE LATEST DATA ON THE COVID-19 SITUATION IN MALAYSIA