KUCHING: Datuk Sim Kiang Chiok is disappointed that the wage subsidy programme under the Malaysian Economic and Rakyat’s Protection Assistance Package (Permai) will only cater for states under the movement control order (MCO) and only for a month.
“My hope is that it can be extended to all states for three months. This will assist in reducing unemployment and help businesses to maintain their production when the pandemic is over,” said the Sarawak Housing and Real Estate Developers’ Association (Sheda) Kuching branch chairman.
He pointed out that MCO 2.0 was imposed in major economic states which contributed about 66 percent of the nation’s gross domestic product (GDP), adding that even allowing five essential economic sectors to operate with strict standard operating procedures (SOPs) and limited working hours would still have a negative spin off on the rest of the country.
He said most of the expected assistances were included in the Permai package but the requests from most businesses were for wage subsidies and automatic moratorium for bank loans.
In this regard, he also expressed disappointment over the lack of automatic moratorium for bank loans.
“Automatic moratorium for bank loans is much requested by many sectors of the business and working population. Under Permai, the government has not instructed the banks for automatic moratorium but left it to the respective banks to deal with individual applications,” Sim said on Tuesday (Jan 19).
He said automatic moratorium for all bank loans basically eased each household and business by helping with the cash flow in the current low business environment caused by the lockdown, SOPs and shorter working hours.
“Also, when loans are being repaid to the bank, it is very difficult to reapply for new loans as most banks consider it very risky to lend in this period in time.
“So giving automatic moratorium will assist businesses and households by allowing them breathing space to survive through this unprecedented period without any bank default and subsequent legal foreclosure and bankruptcy, which will have a very negative impact to the banking system and overall economy,” he said.
Deferring loan repayments could also help business working capital, he said, adding that there were no losses to the banks as all interests were still chargeable.
“We can say that even in this pandemic, banks are still very profitable and extending automatic moratorium will be no loss to them but will instead preserve their customer base and business relationships.”
Sim said the Permai initiatives were timely in view of MCO 2.0 and the Emergency Ordinance (EO) being implemented recently.
He said it was a bold step by the government to allow foreign-owned companies operating in Malaysia with at least 75 percent local employees to obtain the Danajamin Guarantee Scheme (SJPD) in order to keep up employment and maintain foreign businesses’ interest in the country.
“However, the government should also assist local businesses with the guarantee and lower lending requirements for viable businesses with up to three late payments and late audited account to qualify for these bank loans as banks will reject any bank loan even with a single month’s late repayment. The lending guidelines are very strict and is difficult to borrow, especially for small businesses,” he said.
From the Permai announcement, he said it could be projected that vaccination would end by March next year and he hoped the government would provide a clear, scheduled, and transparent exit plan from the pandemic and EO.
“For Sarawak, my hope is that our state government will also help us further to reduce and delay all collections of our statutory rates and assessment utilities, as well as extend Sarawakku Sayang Special Assistance (BKSS) initiatives,” said Sim.