During total lockdown, govt must be prepared to announce latest fiscal aid to assist affected individuals, traders and communities
by NUR HANANI AZMAN / pic by TMR FILE
THE government must ensure that the people are afforded a minimum level of welfare protection, if a total lockdown is imposed.
No matter how long the duration of the lockdown would be, most importantly, it must be accompanied by a large income replacement policy for those affected by the lockdown, economist Hafiz Noor Shams told The Malaysian Reserve (TMR).
“More specifically, the government should replace any income loss suffered by individuals to up a certain level and this is particularly relevant for the self-employed.
“For employees at risk of losing their jobs, they may require wage subsidies. For those without jobs, they would require unemployment benefits.”
Hafiz said it is difficult to say who will be most affected without generalising, but from past experience and statistics, he said youth and those without degrees will be impacted due to unemployment.
“Additionally, refugees, migrant workers and other traditionally marginalised groups have had a tough time.
“It’s reasonable to expect lockdown would reduce income for families and this is the reason why the government needs to provide income replacement to tide everybody over,” he added.
Putra Business School Assoc Prof Dr Ahmed Razman Abdul Latiff said the government must be prepared to announce its latest fiscal aid to assist the affected individuals, traders and communities.
He believes assistance such as bank moratorium can be reintroduced since it will not cost the government money and the banks are still making profits.
“Maybe this time, the moratorium will be targeted at those who have difficulties in paying.
“Other types of moratorium should be introduced, such as rental fee moratorium and assessment tax moratorium. These moratoriums will not cost money to the federal government,” he told TMR.
In terms of direct financial aid to the affected individual, household or small and medium enterprises, instead of direct cash injection, the government can introduce food, utility, services vouchers or credits to ensure these groups will still be able to continue economic transactions even without the cash.
“The organisations that accept the vouchers or credits can later apply for rebates on their tax claim to the government.
“This will reduce the need for the federal government to seek additional borrowings,” he explained.
Center for Market Education (CME) CEO Dr Carmelo Ferlito, however, said no western country has defeated Covid-19 with lockdowns.
Ferlito opined that a new leadership seems very much necessary to handle the situation.
“The Parliament should be allowed to reconvene in order to decide the way forward and to call for the creation of an appropriate task force, which needs to be free from political influence.”
The CME, which is working on a policy paper indicating a comprehensive management and exit strategy for Covid-19, suggested the government accelerate its vaccination pace.
“By avoiding lockdowns, the economy can restart and resources can be created to be invested to strengthen the healthcare system,” he said.