Fresh RM10b stimulus to combat pandemic

by ALIFAH ZAINUDDIN / pic by BLOOMBERG

PRIME Minister (PM) Tan Sri Muhyiddin Yassin yesterday unveiled an additional economic stimulus package worth RM10 billion, which includes cash aid for struggling households and grants for micro-businesses, to help cushion the impact of the Covid-19 pandemic.

The new package takes Malaysia’s total spending to combat the virus fallout to RM305 billion, or about 20% of GDP.

“Although we have seen early signs of economic recovery, the government is mindful of the hardships faced by both workers and employers during this recovery phase,” Muhyiddin said in a televised address to the nation.

The latest plan, called Kita Prihatin, includes an additional RM2.4 billion for the wage subsidy programme (WSP), RM7 billion for Bantuan Prihatin Nasional (BPN) and RM600 million worth of special grants for small enterprises.

The WSP 2.0 is extended to companies which have seen their bottom line drop by at least 30% year-on-year since the Recovery Movement Control Order (RMCO).

Successful applicants will receive a RM600 monthly subsidy for a period of three months for a maximum of 200 workers. Applications for the new WSP are open from Oct 1 until Dec 31, 2020.

The government had previously allocated RM15.3 billion under the subsidy programme which targeted 3.3 million workers.

The WSP has benefitted a total of 2.63 million workers involving a payout sum of RM10.4 billion as of Sept 11. Companies can still apply for the initial subsidy, which still accepts applications until the end of this month.

The popular BPN cash aid will also be included in the new package, which Muhyiddin said will benefit households and individuals in the bottom 40% (B40) and middle 40% (M40) income brackets.

The second round of cash aids will be paid in two tranches — first in October this year, and the second payment in January 2021.

Muhyiddin said some 3.7 million B40 households will receive a total of RM1,000, while 3.8 million B40 individuals will receive RM500 in cash.

Additionally, some 1.4 million M40 households will receive RM600, and 1.7 million M40 individuals will get RM300 each.

“The government will directly channel the funds to 10.6 million recipients approved previously. For those who have yet to receive any cash aid, the government will provide an opportunity to appeal and make a new application,” Muhyiddin said.

Putrajaya has spent RM11.2 billion for BPN to date which has been disbursed to 10.6 million eligible recipients.

Muhyiddin said the government will also reintroduce the Prihatin Special Grant (GKP), a one-off RM3,000 cash aid given to local micro-enterprises that have been affected by the pandemic.

The initial GKP involved a payment of RM1.63 billion to some 545,000 small businesses nationwide.

Applications for the new GKP will open from Oct 1 until Oct 31. The government expects the grants to benefit 200,000 registered micro business entities. The first few payments are expected to be made on Nov 25.

Muhyiddin concluded his brief address by calling for all Malaysians to unite and back the Perikatan Nasional government in dealing with the challenges brought about by the Covid-19 pandemic.