MANCHESTER: Numerous players in the maritime industry are looking forward to the tabling of Malaysia’s Budget 2020 next month, hopeful that the government will seriously look into specific areas of the industry to spur its growth.
These include outlining policies and giving out incentives to encourage local companies to compete on the global stage.
Malaysian Shipowners Association chairman Datuk Abdul Hak Md Amin said he hoped the government would look deeper into certain issues that have stunted the industry’s growth for quite some time.
“We hope the government would waive the income tax for a shipping company, of which currently lasted only until Dec 2020, permanently. With the permanent waiver of the income tax, shipping companies can plan and invest in new ships, hence increasing the Malaysian tonnage.
“We also hope the government would fully reinstate the Cabotage Policy as the abolishment has distorted the industry growth,” he said when contacted by Bernama.
Effective June 1, 2017, Sabah, Sarawak and the Federal Territory of Labuan were no longer bound by the cabotage policy imposed on all cargo shipping services between Peninsular Malaysia, Sabah, Sarawak and Labuan.
Among other things, the liberalisation of the cabotage policy had led to more foreign ships moving freely in Malaysian waters as domestic shipping licence were no longer needed.
The country’s Budget 2020 is slated to be tabled on Oct 11.
Abdul Hak also explained that given the current challenging market condition, he hoped that government would also provide shipping fund with low-interest rate to support the purchase of new ships and to help reactivate the lay-up ships.
As for the Shipbuilding and Ship Repair (SBSR) industry in Malaysia, the government should deeply consider incentives for local shipbuilders and remove service tax, import duty, import licence for steel among others, to be competitive with China.
It would also encourage shipping companies irrespective from Malaysia or elsewhere to build new ships in the country.
Apart from that, Abdul Hak said another area that the government need to look at is giving out grants for building Liquefied Natural Gas (LNG) fuelled ships to shipping companies that intend to go green.
“This is important because Malaysia is one of the biggest exporters of LNG and Malaysia must be seen as the leader in promoting LNG fuelled ships,” he added.
Seconded the idea, Muhibbah Marine Engineering Sdn Bhd (MMESB) director, Ooi Kien Chuan said it is timely for the government to ensure that policies and financial assistance for the industry parallel with each other.
“We can’t have one financial assistance given out to the players while the policy is pointing at a different direction, both must be focusing at growing the industry, he added.
He added that shipbuilding business has been on the downtrend in the past couple of years and without proper plans, shipyards could be out of business in no time.
“It is not entirely local issues, weak global sentiment and tough environment out there has impacted business sentiment domestically, but we can’t afford to sit down and wait, we need to attract local shipowners to build locally and at the same time attract global customers,” he said.
Describing the business environment as dull, Ooi said vessels operators in the oil and gas industry are cautious in their business plan and in moving forward.
“They are growing but in a very slow pace, unlike before,” he said. – Bernama