KUCHING: The latest Pemerkasa Plus package offered by Putrajaya will have limited impact on the economy as there is only RM5 billion of direct fiscal injection in cash assistance compared to the previous package of RM11 billion, said SME Association of Sarawak.
In a statement, the association said the amount is insufficient to restore the damage implicated by the Covid-19 pandemic, despite it giving some relief to small and medium enterprises (SMEs) from the impact of the full lockdown.
“There is nothing new as most of the measures had been announced previously. It is just a matter of increasing the allocation amount and extending the current aid to a certain period.
“Nonetheless, we still welcome the Wages Subsidy Programme (WSP) for one month, the three-month automatic loan moratorium or 50 percent reduction in loan instalment repayment as well as an additional RM2 billion allocated to the Targeted Relief and Recovery Facilities (TRRF) by Bank Negara Malaysia (BNM) for SMEs,” it said today (June 2).
It also suggested the extension of WSP to three months instead of just one month, which the association deemed as “insignificant”.
“Most SMEs are paying full salary to their employees and the one month subsidy only applies to remuneration of RM4,000 and below. As most specialised groups like engineers and organisation’s management level are above the classified pay segment, most SMEs are facing difficulties in maintaining them and laying them off is the only regretful option.
“Furthermore, most of the SMEs which are not permitted to operate even before the movement control order (MCO) are significantly having it worse with no income for a much longer period,” it added.
The association said the cash handouts to B40 and SMEs will have a high impact on the consumption market as the opening of business sectors after the MCO will ensure a rebound of the economy.
“Contrarily, the government should provide more assistance to the M40 group as this group is also affected by the MCO. According to a survey, most M40s will be downgraded to B40s in this round of lockdown.”
Nevertheless, the association believed that the nation’s economy is on a recovery path despite the limited stimulus package and downside of the full lockdown.
“GDP growth projection shall maintain at slightly more than 4 percent for 2021. Hence, we shall all work together to contain the virus to make sure there is no further MCO in the future, while the government is accelerating the immunisation programme. That is the best bet to revive the economy,” it added.