The government needs to add more fiscal measures to make up for the lost income and revenue suffered by workers and businesses respectively, according to experts.
The People’s Protection and Economic Recovery Package (Pemulih) stimulus package was a missed opportunity to introduce more fiscal injections, said Research for Social Advancement communications director Raja Ahmad Iskandar Fareez.
“It should be enough to ensure Malaysians are gainfully employed during the crisis and enable the population to live alongside the virus in the longer term by enhancing our healthcare ecosystem and enabling sectors to reopen safely and responsibly.
“More spending should be allocated to ramp up the nation’s healthcare service capacity to cater to surges in both Covid-19 and non-Covid cases in the event of worsening outbreaks,” he told The Malaysian Reserve (TMR).
He believes simultaneously, a systematic approach of identifying, tracing and containing transmissions through widespread preventive testing is needed to ensure businesses can resume operations in a more controlled mode of risk-based assessment rather than an arbitrary classification of “essential vs non-essential” services.
“Effectively, this approach will mitigate job losses due to stringent lockdown, while the large-scale pandemic management mobilisation measures could potentially create temporary employment.
“In order to ensure that no one is left behind, the government must also enhance its social protection programme to include robust financial assistance to ensure those who have lost their means of income can survive until they can get back on their feet and earn a living again.”
Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said the third Prihatin Special Grant (GKP 3.0) will provide RM1.5 billion worth of assistance where RM1,500 will be alloted to each entrepreneur to ensure business continuity.
The additional payment of RM500 to eligible micro, small and medium enterprises (MSMEs) under GKP 3.0 that began yesterday will be gradually credited to registered recipients’ bank accounts.
Apart from GKP, the minister said there are other initiatives that the segment can benefit from as preparation for them to plan for their recovery in the coming months.
Among the aids include financing facilities for micro SMEs from bank Simpanan Nasional, Agrobank, SME Corp, Yayasan Pembangunan Ekonomi Islam Malaysia and the National Entrepreneur Group Economic Fund (TEKUN Nasional) totalling RM2.9 billion.
Tengku Zafrul added that Bank Negara Malaysia also provides financing of RM8.6 billion for industry players where the amount includes an additional allocation of RM2 billion via Pemerkasa+ package and another RM2 billion injection from Pemulih.
Meanwhile, Gerakan Ekonomi Malaysia president Armin Baniaz Pahamin said Pemulih is almost the same stimulus package introduced last year, but with a lower amount.
Armin, who is also a member of Parti Pejuang Tanah Air central executive committee and chief central economic bureau noted that Pemulih is the eighth stimulus package, but he stressed that the government will have to continue to provide assistance if the pandemic is not contained.
“Government needs to correct its priority and have a comprehensive plan on how to tackle the pandemic, which is the root cause. Movement Control Order is to control movement and not to control the economy from operating.
“The RM10 billion direct fiscal injection is small. Our credit rating was maintained by S&P at ‘-A’. Government can borrow more money to help the people. It is hard for businesses and the people to borrow money (and it’s harder to service the repayment when the economy is closed) and be burdened with more debts with accrued interest, but the government can borrow money (especially with -A credit rating) and help businesses and the people by giving them cash to survive,” he told TMR.
Armin said businesses and the people do not think of making profits, but rather to just survive.
“The numbers of suicide cases is at a record high and the biggest factor was debts.
“(But) the message business community gets from Pemulih is to let the people accumulate more debts without any future savings.
“Evidently the many easy loans being introduced under the government stimulus package and the recent approval for licensed money lenders to be allowed to operate speaks volumes,” he said.
– Published in The Malaysian Reserve on 13 July 2021.