Business groups: Tweak Budget 2021 or risk bigger fallout
(Focus Malaysia) – BUSINESS associations upped the pressure on Finance Ministry, urging the latter to add more provisions in Budget 2021 to help enterprises survive during the COVID-19 pandemic.
In a joint statement, several business organisations urged the Government to provide more sustainable and meaningful intervention before more businesses get crushed due to the economic downturn.
“Currently, small and medium enterprises provide employment to about 48.4% of Malaysians.
“Based on the statistics by the Social Security Organisation (Socso) in Aug, the manufacturing sector had reported job losses of about 24%.
“It is followed by the accommodation and food and beverages sector (15%) and wholesale and retail sector (14%) – the three worst affected industries.
“Although most businesses are permitted to run as usual, the extended conditional movement control order (CMCO) has placed businesses, particularly retail and restaurant, in a difficult situation,” it said.
The joint statement was signed by the Malaysia Retail Chain Association, SME Association of Malaysia, Bumiputra Retailers Organization and Malaysia Shopping Malls Association (PPK).
Two weeks ago, Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz tabled Budget 2021 at the Dewan Rakyat worth RM322.54 bil.
The expansive budget was an addition to the six stimulus packages worth over RM300 bil announced this year, aimed at reviving the economy and push assistance towards those affected by the COVID-19 pandemic.
The minister also rejected calls for a blanket loan moratorium extension, adding it will only be extended on case-by-case basis.
However, the business groups were not impressed by the Government’s proposal.
They added that if the Government does not help them to address fundamental issues plaguing businesses, the rate of job losses will spike from Oct onwards due to more closures.
“And this will cause cascading effect on the economy as when more companies fold, the Government will automatically lose a sizeable chunk of revenue from corporate income tax.
“Take note that SMEs contributed to about 38.9% to the nation’s gross domestic product last year,” it said.
On what the Government can do to address their concern, the business associations recommended the following:
- Tenant relief assistance through direct financial assistance to shopping mall owners and landlords;
- Waiver of statutory payment for businesses;
- Targeted tax incentive for retail and tourism spending;
- Extension of wage subsidy programme;
- Tax relief for safety and hygiene expenditures;
- Extension of bank loan moratorium;
- Restart tourism via a ‘Travel Bubble’ programme; and
- COVID-19 standard operating procedures compliance certification for retail and restaurant premises.
“We welcome dialogues with the Government through relevant ministries to develop a sustainable solution to help businesses weather this unprecedented situation,” added the business associations.
Many have panned the recent budget, saying it did not offer holistic solution to remedy the lives and livelihoods of Malaysians affected by COVID-19.
To date, Parti Amanah Negara (Amanah) had announced that they will not vote for Budget 2021 until amendments are made.
The announcement may not bode well for the Government as the latter only holds a two-seat majority at the Dewan Rakyat, while Amanah has 11 seats.