THE National Recovery Plan (NRP) announced earlier this week is thought to give consumers and businesses a better indication on how the economy will reopen and when foot traffic will be able to come out in droves again.
Following the estimated timeline, movement restrictions will only be eased in earnest sometime in October, assuming the criteria for the phases under the NRP are met.
While it may bring a little certainty on the reopening of the economy, the framework would mean that businesses – especially those in the tourism, hospitality and retail sectors – will have to hang in there for at least another four months.
Given the prolonged phased restrictions, business groups note that the assistance provided under the Pemerkasa and Pemerkasa Plus stimulus packages may not be enough to support SMEs.
In a televised interview on Thursday, Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz said the government was looking into new initiatives, including another possible Wage Subsidy Programme (WSP), to be rolled out throughout the NRP where necessary. However, he noted that these initiatives will be announced towards the final phase of the NRP.
While this may be welcomed news, businesses would prefer if assistance was given sooner rather than later, particularly in terms of help with their cashflow. SME Association of Malaysia national vice president Chin Chee Seong feels more can be done to help businesses stay afloat.
He hopes the government will be able to provide further wage subsidy support for another three to six months, delay statutory payments for six months and implement the automatic loan moratorium till the end of the year to help small businesses conserve their cashflow now.
Chin adds that further details on the NRP need to be given in advance for small businesses to make decisions on their viability and plan for a recovery.
“We need more structure and strategy in the plan on how to revive the economy. Details need to be specified, for example, for entertainment-based businesses, can they be opened to people who have had one dose of the vaccination or to those who have been fully vaccinated under a particular phase. This will make it easier for such businesses to anticipate and plan ahead, ” he says.
This will also help consumers anticipate when they’ll be able to patronise certain establishments.
“Businesses need to know when they can open and consumers when they can go back out, ” says Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) SME committee chairman Koong Lin Loong.
While Malaysia has been fortunate to see a strong growth in export this year, Koong notes that the economy is still very much driven by domestic consumption and therefore, it is important to ensure enough is done to instill consumer confidence to help recovery efforts.
And this means ramping up targeted vaccinations and enforcing standard operating procedures to break the chain of Covid-19 infections and bring down the number of daily cases to a manageable count.Koong also urges the government to relook the allocations made under its seven stimulus packages so far as well as Budget 2021 to quickly roll out the planned assistance and expenditures.
“Look at what has not been used yet and push it out now. We can’t afford to wait till the end of the year to spend the budget. Businesses need immediate help, particularly the mid-tier companies. And these are the companies that have bigger loans and employ more people. So they need support like the WSP and loan moratorium. This will also help the many SMEs that are in their supply chains and help preserve jobs, ” he says.
Koong also notes that financial institutions have a role to play to help small businesses.
“Bankers know their customers well enough. They’ll be able to observe their cashflow trends and know which industries or businesses are affected. They should, then, be able to extend the moratorium or to reduce their monthly payments. This will help SMEs save their cashflow, ” he says.
But while SMEs need all the assistance they can get during this period to survive, there are also steps that they need to take to ease their cashflow burdens.
One of them is to do a budget for the next three months to relook at their income, expenses and cashflow for the coming months. This will help them have a better view of the viability of their business and decide if they should shutdown the business to stop the bleeding.
Koong also advises businesses to look into the various measures and initiatives that have been announced by the government to tap whatever aid is available.
“SMEs can’t just expect to get free money. They should look at which measure they can use and they must be aware of the application deadlines and the quantum of the assistance.
“Companies must also make the effort to contact their bankers, especially if you are struggling with your loans. If you can’t get them, you can also contact AKPK or the Small Debt Resolution Scheme for help, ” he adds.
Additionally, SMEs need to take a closer look at their products and services to see which ones are able to help them generate immediate cashflow and which ones can be moved online.
This will help them decide if they need to switch products or take other actions like downsizing.
“Businesses themselves must be prepared for this. Only then, with the help of the government, can they better sail through. Every business is unique so they need to look into their own operations, ” says Koong.