‘Much-needed relief for industries affected by virus’

Socio-economic Research Centre (SERC) executive director Lee Heng Guie(pic) noted that the package is a broad-based economic stimulation which targets to mitigate economic pain as well as protect jobs.

PETALING JAYA: The sizeable RM20bil economic stimulus package provides a much -needed relief for industries affected by the Covid-19 outbreak.

Socio-economic Research Centre (SERC) executive director Lee Heng Guie noted that the package is a broad-based economic stimulation which targets to mitigate economic pain as well as protect jobs.

“The size of the package is above expectations as we were looking at RM15bil.

“I hope the government will expedite the public investments.

“Measures targeting individuals and businesses, particularly the tourism sector meet our expectations and are rightly channelled to the sector, such as the encouragement of in-bound tourism through the disbursement of e-vouchers and personal income tax relief, ” he said.

Meanwhile, UOB Kay Hian head of research Vincent Khoo opined that the Employee Provident Fund (EPF) rate cut by 4% from 11% to 7%, came as a surprise as it was larger than expected, and a significant portion of this RM10bil from this cut is expected to be translated to an increase in consumer spending.

However, the impact of Covid-19 is still apparent, particularly evident in the retail sector, with low mall traffic.

“Overall, the economic stimulus package is a modest amount contributed by the government.

“Hence, this should not affect the nation’s sovereign credit ratings and there is no overspending, ” said Khoo.

On the SME segment, the Credit Guarantee Corporation Malaysia Berhad (CGC) is participating in Bank Negara RM2bil Special Relief Facility (SRF) for SMEs under the government’s 2020 Economic Stimulus Package.

The SRF is to alleviate SMEs’ short-term cash flow problems due to the COVID-19 outbreak and to assist them in sustaining their business operations.

In support of this, CGC is offering BizJamin SRF and BizJamin-i SRF guarantee schemes to SMEs affected by the Covid-19 outbreak from March 6 onwards to December 31,2020.

RHB Banking Group managing director Datuk Khairussaleh Ramli also announced that RHB is currently offering those who are affected by the Covid-19 outbreak, a moratorium of up to six months for monthly instalment payments of loans and financing, which are reviewed on a case-to-case basis.

“This stimulus package will help ease the financial burden faced by the business community and individuals in light of Covid-19 outbreak and headwinds in the local and global business environment.

“It comprehensively addresses the needs of businesses including SMEs during this trying period, in particular for tourism and infrastructure related sectors that are likely to be affected.

“The stimulus will ensure that the economic risks from Covid-19 is effectively managed.

“It will also further strengthen the economy by mobilising domestic sources of growth, boosting consumption and driving quality investments, ” he said.

Mah Sing Bhd founder and group managing director Tan Sri Leong Hoy Kum lauded the government’s move to reduce the EPF’s minimum contribution rate which will potentially unlock up to RM10bil worth of private consumption, as well as the 6% service tax exemption for hotels, RM100 travel vouchers for Malaysian citizens, along with the personal income tax relief of up to RM1,000 for domestic travel.

“This will enable consumers to have extra spending power, which in turn would boost domestic expenditure and consumer sentiment.

“This includes spending on purchase of a property particularly in the affordable segment targeted at first-time homebuyers.

“Our newly launched ‘Eazy to Own’ campaign ties in well with this move, ” he said.