PETALING JAYA: An economist has urged Putrajaya to unveil its medium and long-term economic plans for a post-Covid-19 era to complement the RM35 billion Penjana recovery plan.
Universiti Tun Abdul Razak economist Barjoyai Bardai said he viewed Penjana as more of a subsistence plan to support workers and businesses.
“There is RM10 billion in fiscal injection but the bulk of this will go towards the government’s wage subsidy programme,” he said.
Barjoyai said there was no guarantee that the economy and business will return to normal and this means that another round of wage subsidies may be needed.
“This is not to say that it is bad. On the contrary, preventing unemployment is very important, especially for a short-term recovery plan, but it would have been good to see some medium and long-term initiatives as well.”
This, he said, would allow for analysts, businesses, investors, workers and the public to see a larger picture.
“What are some of the fundamental reforms that the government will embark on? What long-term policies are we looking at?
“I think the government has done well to manage the crisis and keep everyone’s head above water, but we need to know what the government’s plan is beyond this.”
Barjoyai said such medium and long-term economic plans will help boost business and consumer confidence and sentiments, which will in turn support economic recovery.
He said he would like to see how the government plans to help SMEs in traditional and low-value industries move higher up the value chain.
He also said while the tax incentives for manufacturers such as the automotive industry and new foreign investments were good, these may take time to yield the desired results as both consumers and businesses were now cautious due to uncertainties at the global and local level.
Malaysia International Chamber of Commerce and Industry executive director Shaun Edward Cheah lauded “Penjana” as a people-centric plan with the extension of wage subsidies, SME grants, and increasing disposable incomes among others.
“What is missing is the ecosystem or a liberalised investment environment to entice foreign investment into the country.
“The best way of attracting foreign investments in the short term is the liberalisation of the economy, stable fact-based policies and not knee jerk flip-flop policies, such as the freezing of new liquor licences, curbing confidence in the tourism-led recovery.”
Cheah said the government should focus on enabling a conducive environment for foreign investment, which in turn provides confidence for domestic investments.
“The rakyat and businesses don’t need more illusionary cash handouts and loans. They need an economic environment for them to rejuvenate and thrive. That’s sustainability,” he said.
The Federation of Malaysian Manufacturers welcomed the government’s focus on securing jobs, particularly through hiring incentives, the expansion of the wage subsidy programme, training programmes and assisting businesses in embracing innovation and digitalisation.
“FMM, however, was looking forward to the wage subsidy programme being extended to all employees regardless of wage level, and removal of the limit of 200 employees per company,” said the federation’s president, Soh Thian Lai.
He said the tax rebate for newly established SMEs was also good but hoped that the incentive could be extended to existing SMEs.
Soh said the 0% tax rate and the investment tax allowance introduced to encourage new investments to relocate to Malaysia should also be extended to investment projects approved since 2019 which had yet to commence due to Covid-19.
“These are already ‘captive’ and should be retained as much effort had been carried out to secure these investments,” he said.
Moving forward, Soh urged Putrajaya to continue to pump prime the economy by expediting infrastructure and development projects, as well as increasing domestic consumption.
“We also call on the government to place more emphasis on mid-tier companies and introduce more initiatives to support them given their capability and capacity and the fact that they represent a large portion of the total employment in the country,” he said.
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