PETALING JAYA: The government is meeting business associations to gather feedback on immediate issues to save and prevent the businesses from folding.
The meetings are with several business bodies representing large companies, small and medium enterprises (SMEs) and petty traders to gather information. They were held via video conferencing calls, meant to seek solutions to the woes faced by entrepreneurs and businessmen.
These meetings would continue today with more business associations.
The Associated Chinese Chambers of Commerce and Industry of Malaysia’s (ACCCIM) president Tan Sri Ter Leong Yap told StarBiz that the meeting held yesterday went well and that three cabinet members were in attendance.
They were Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz, Minister in the Prime Minister’s Department Datuk Seri Mustapa Mohamed and Transport Minister Datuk Seri Wee Ka Siong.
“A lot of members (of the ACCCIM) have voiced their frustrations of having a very tough time – no sales but operations overheads are still ongoing. They (the government) seem to be receptive of these issues, ” Ter said.
He said the discussion yesterday was focused mainly on the immediate issues to save and prevent the businesses from folding.
“It was very much focused on the cashflow issues which include immediate measures to prop up the SMEs. We discussed things that need quick fix – many SMEs need oxygen to survive. The government has listened and said they would do something about the situation.
“Covid-19 is unprecedented. We hope the movement control order (MCO) can end by April 14, but there is a possibility it may be extended, ” Ter said.
He said that even after the MCO is lifted, the economy wouldn’t recover immediately. For example, he said, people would by and large still not eat out after the MCO has ended.
Meanwhile, SME Association of Malaysia president Datuk Michael Kang said that based on a survey done over the weekend, 37.8% of over 15,000 respondents said their cashflow would only last till April. This means that if they were to pay out full salaries for this month, there is a likelihood of them folding soon.
Additionally, some 25.5% said they would be laying off their workers.
“Clearly, cashflow is their biggest issue at the moment. So our proposal to the government is to quickly sort out this cashflow issue.
“The government was very positive about the proposals we put forward. The government asked us to quickly draft a simple proposal of the different measures for the industries, so that this can be brought to the Cabinet meeting on Wednesday. They agreed to either revisit the second stimulus package or to provide additional stimulus to help businesses.
“We are quite hopeful that these proposals will be taken into consideration. Otherwise, the economy will be affected. The SMEs are the backbone of the country’s economy. Once the SMEs collapse, it will be very difficult to rebuild them, ” said Kang.
Separately, the Federation of Malaysian Manufacturers (FMM) said in a statement that SMEs, which form the backbone of employment in the country, should be given more incentives.
FMM hoped the government would urgently consider its suggestions that would help ease the immediate cashflow and financial constraints of businesses, especially those that have faced disruption to production and trade in an unprecedented manner due to the Covid-19 outbreak and the MCO.
“FMM hopes that banks will fully assist affected companies with reasonable interest charges and focus on saving the financially distressed companies from folding with easier complied conditions, since the government already provides guarantee and with low interest through the Danajamin guarantee scheme, ” said president Tan Sri Soh Thian Lai.
It also appealed to Bank Negara to further intervene and ensure that there is consistency across all financial institutions in the treatment of interest during the moratorium period.
“FMM is of the view that banks should not compound interest but rather waive or reduce the interest during the moratorium period to further assist the companies that are affected, ” it said.
Pertaining to the special RM5bil Special Relief Facility for SMEs, FMM hoped interest rates charged could be further reduced to 2% and lending conditions lessened, including the strict collateral requirements that are being imposed.
FMM noted that in view of the prolonged MCO, many businesses are already grounded to a halt.
“In addition, employers are not allowed to cut wages or request employees to utilise annual leave during this period.
“Except for the essential product manufacturers that have been allowed to resume operations but with a 50% reduction in employees, the majority would have to continue paying wages with no work performed during the MCO period, ” FMM added.
On this front, it said the RM5.9bil wage subsidy scheme that had been announced by the government earlier should be doubled to RM12bil.
“The allocated amount is not sufficient since it is estimated to only cover 3.3 million workers. The RM600 wage subsidy introduced should have been extended to all employees regardless of wage level, ” it said.
FMM suggested that the subsidy be made automatic without the need for companies to prove reduction in earnings by 50%, as all companies would be experiencing a significant drop in revenue and sales.
“In fact, we had also proposed for a 30% wage subsidy by the government on a tripartite shared basis with employers and employees, ” Soh said.
FMM also proposed there should be a complete exemption or a reduction in the employer contribution to the Employees Provident Fund (EPF) until the end of December 2020.
This is as opposed to the current announced deferment/restructuring/rescheduling option of the EPF payment, the FMM said.
Soh explained that the current initiative of deferment would still tie employers down financially as they focus on their respective business revival plans to ensure viability and continuity and keep jobs in the next six months to a year.
It also asked the government to further increase the electricity discounts to major industrial and large users including the medium and high-voltage customers.
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