PM: Impact of current MCO to be manageable

“Furthermore, high-impact projects and initiatives with significant economic multipliers will continue to drive the economic recovery momentum, ”Tan Sri Muhyiddin Yassin said.

KUALA LUMPUR: Tan Sri Muhyiddin Yassin expects the impact of the current Movement Control Order (MCO) on the economy to be manageable as growth will continue to be supported by strong exports sector and the global trade recovery.

The Prime Minister said on Monday the economic stimulus packages, Budget 2021 and the Perlindungan Ekonomi dan Rakyat Malaysia (Permai) assistance package will continue to boost consumption.

“Furthermore, high-impact projects and initiatives with significant economic multipliers will continue to drive the economic recovery momentum, ” he said in a televised address at 4pm.

Unveiling the RM15bil Permai package on Monday, he said to finance the PERMAI assistance package, the government will re-allocate existing funds based on current priorities and through more prudent spending. The government will also ensure that all initiatives announced are implemented expediently and effectively.

He also emphasised since the implementation of MCO, coupled with the Emergency Proclamation in force from Jan 11 to Aug 1, the capital markets such as Bursa Malaysia and the bond market have remained stable and orderly.

Muhyiddin said during the implementation period of this MCO, assistance in the form of moratorium and reduction of loan repayment instalments will continue.

The moratorium facility, including extension of the moratorium and restructuring of loan repayment will continue to be offered by banks as announced previously. For flood-affected states, 15 banks have offered the loan repayment moratorium.

To date, more than 1.3 million borrowers have applied for and received such assistance, with an approval rate of 95% for individual borrowers and 99% for SME borrowers.

“Malaysians need not worry about contacting their respective banks should they require repayment flexibility, ” he assured them.

He also said the government acknowledges that various incentives and tax reliefs have successfully stimulated the economy in several sectors. In line with the new normal, there is greater reliance on the use of digital equipment.

“Hence, I am pleased to announce that a special tax relief of up to RM2,500 on the purchase of mobile phones, computers and tablets which expired on Dec 31,2020, will be extended for another year until the end of 2021, ” he said.

On the extension of the provision of free internet access, he said the telecommunications industry is committed to provide assistance during this MCO period.

“The provision of free 1 Gigabit data has been offered to the public to browse websites, including for educational purposes. This RM500mil facility started on Ja 1,2021, and will be extended until the end of April 2021, ” he said.

As for the wage subsidy programme 3.0 under SOCSO, it will be enhanced whereby all employers operating in the MCO states will be eligible to apply, irrespective of sector.

For a period of one month, eligible employers will receive a wage subsidy of RM600 for each of their employee earning less than RM4,000.

In addition, the wage subsidy limit of 200 employees for each employer will be increased to 500 employees. This initiative involves an additional allocation of RM1bil which is estimated to benefit 250,000 workers employing more than 2.6 million workers.

Muhyiddin also said under the PENJANA package, the Government announced the Danajamin Guarantee Scheme, or SJPD amounting to RM50bil to support the private sector’s growth and boost the country’s economy.

As part of the enhanced measure, the government will:

First: Increase the maximum financing from RM500mil to RM1 bil;

Second: Expand the scope of financing to cover working capital with a guarantee period of up to 10 years; and

Third: Allow foreign-owned companies operating in Malaysia to also obtain the SJPD guarantee provided that Malaysian employees account for at least 75% of their workforce.

He said the Government hopes the improved SJPD will help promote growth of the private sector and retain Malaysia's position as an investment destination of choice.

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