Review help for the nation’s economic backbone

The question is, are we ready to be bold enough to help the people?

pic by TMR FILE

THE highly anticipated Budget 2021 seems to be placed under heavier scrutiny while getting a lot more criticism than usual, perhaps because it is Perikatan Nasional’s maiden budget.

Or it could also be due to the fact that the people from all walks of life had high hopes on the government’s financial plan amid the Covid-19 pandemic.

Prior to the budget presentation, it is not unusual for people or business sectors to voice out their wish list.

Still, the biggest budget in history somehow fell flat on the people’s expectations.

Industry players from the worst-hit sectors — tourism and small and medium enterprise (SME) — claimed that the government had paid little attention to their pleas.

“The budget has failed to meet the needs of tourism enterprises, particularly SMEs, and does not address the key issue of protecting jobs.

“The wage subsidy programmes should have been enhanced to avoid continuing lay-offs and the loan moratorium should be extended up to June 2021 for tourism businesses,” Malaysian Association of Tour and Travel Agents president Datuk Tan Kok Liang said recently.

Granted, it is impossible to satisfy everyone, but the government may need to look into enhancing or giving direct fiscal injections to the SMEs.

This is something that SME Association of Malaysia president Datuk Michael Kang found lacking in the budget.

He noted that there are few measures which could help the SMEs breathe a little, such as the repayment scheme and the extension of the wage subsidy programme. Without a targeted fund, it will be hard for SMEs to recover next year.

“If SMEs can’t survive 2020, they can’t recover or transform,” he said.

His comment is reflective of the current predicament faced by our SMEs or “Makcik Kiah”.

It is pretty obvious that without sales — after having exhausted all of their savings — the SMEs need more direct financial aid or it will have to shut its businesses.

To date, as The Malaysian Reserve previously reported, 9% or 329 SMEs are considering shutting down permanently in the next six months.

Up to 380 SMEs (22%) said their cashflow can last only until October, while 535 SMEs (31%) until the end of November, and this survey for SMEs was conducted before the latest round of Conditional Movement Control Order.

With this grim figure staring at us, the government needs to review its allocation. This is where the Prihatin (stimulus package) part should come into decision-making consideration.

If lack of funds is the excuse — perhaps it is time for the government to look into its figures again.

I am not an economist, but the RM85 million allocation for a propaganda unit may perhaps need a review?

Some development projects should be put on the back burner first in order for us to save the people, the jobs and the SMEs in general.

SMEs’ contribution to Malaysia’s GDP increased to RM521.7 billion or 38.3% in 2018 compared to RM491.2 billion or 37.8% in 2017.

Already, economists have cautioned that SMEs are likely not going to achieve the expected GDP contribution of 41% and the growth of SMEs is expected to decline by 1% this year.

If we fail to address the issues plaguing our SMEs, we are en route to suffer worse economic decline.

It also goes without saying that this will affect the government’s revenue and hinder its projection for next year.

Put the SME sector aside, even the people have also requested for withdrawal of their own retirement savings. That should speak volumes to the authority of how dire the situation is.

There are many ways to skin a cat, but many experts have expressed confidence that Malaysia has the capability to weather these challenging times.

The question is, are we ready to be bold enough to help the people?

Azreen Hani is the online news editor of The Malaysian Reserve.


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