KOTA KINABALU: The Small and Medium Enterprises Association of Malaysia welcomed the RM35 billion “Penjana” economic recovery plan unveiled by the government today but lamented that it still fell short of what it had fought for.
Its president Michael Kang said he had previously asked the government to set aside at least RM50 billion to help SMEs kickstart the economy.
Kang said market liquidity had been reduced to zero because of the lockdown measures during the past three months.
He said one-third of SMEs had the means to resume operations while the rest needed help from the government.
“The market has lost about RM2.4 billion a day or a total of RM200 billion for the period,” he said.
“About 70% of SMEs need direct financing from the government so they can pay suppliers and other debts and to get the engine moving.”
However, Kang said, the initiatives unveiled by Prime Minister Muhyiddin Yassin allocated RM2 billion by the banking sector to assist SMEs, “which is far from what we had asked for”.
Billed as a short-term economic recovery plan (ERP), the Penjana or Pelan Jana Semula Ekonomi Negara programme has three main goals: to empower the people, propel businesses and stimulate the economy.
Muhyiddin said to help the SME industry, the banking sector will extend RM2 billion through the Penjana SME financing scheme, with each SME allowed to apply for a maximum of RM500,000 starting from mid-June.
Sabah SME Association president Foo Ngee Kee also welcomed the incentives under the package, calling it comprehensive, but hoped the government would improve its delivery system, particularly on the wage subsidy.
Foo said many SMEs in Sabah have yet to receive disbursements of RM1,200 per worker to pay wages in April, for which they have paid out using their own funds.
“If the disbursements are not forthcoming, many will have to use their own money again and this will add to the cash flow problem of the SMEs.
“I am happy the wage subsidy has been extended for another three months, but the delivery will have to be on time,” he said.
Malaysian Employers Federation executive director Shamsuddin Bardan applauded the package, saying it was a breath of “fresh air” for employers and employees struggling during the conditional movement control order (CMCO).
He said the RM5 billion allocation in wage subsidy to 2.8 million employees, extended by three more months, would encourage companies to retain their staff.
“However, the government should consider a longer period as the lingering negative impact of Covid-19 may extend to next year,” he said, adding the government should also consider allocating more funds for this subsidy.
Shamsuddin said the RM1.5 billion under the Employee Incentive Programme, which aims to benefit 300,000 job-seekers, would also encourage employers to hire unemployed individuals and youths.
“This is especially for professionals under the age of 40 and the unemployed over 40, and people with disabilities.
“The training incentives that were announced would encourage employers to engage the unemployed youths and provide them with the necessary skills and knowledge, especially in information technology,” he said.
He also said MEF was pleased that workers in the gig economy would be given social protection under Socso and EPF.
“The setting up of a special committee on national employment is a step in the right direction as this would help to ensure coordination on the kind of careers to be pursued by new entrants in the labour market,” he said.
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