State government urged to help employers affected by MCO pay staff salaries

  • Metro News
  • Friday, 03 Apr 2020

Abang Johari announcing the state government’s special aid package to mitigate the effects of Covid-19. — ZULAZHAR SHEBLEE/TheStar

SIBU: The Sarawak government has been urged to help small and medium enterprises (SMEs) that are badly affected by the movement control order (MCO).

Bukit Assek assemblyman Irene Chang said SMEs form 95% of the businesses in the country and in Sarawak, they were the backbone of the economy.

She said the RM1.15bil stimulus package announced by Chief Minister Datuk Patinggi Abang Johari Abang Openg on March 23 did not offer any financial assistance to the state’s SMEs.

“Neglecting to give financial assistance to these SMEs that are facing difficulties can lead to our local economy collapsing.

“The state government should have a committee in place to look into setting up an emergency fund, with allocation from our state reserves which have over RM30bil, to help SME owners pay the wages of their staff, ” she suggested.

Chang said with the MCO extended by another two weeks until April 14, employers were under tremendous pressure to keep paying the company expenses, including rental and salaries, despite being forced to close operations temporarily.

With mounting debts, some of these companies, she claimed, might force their employees to take unpaid leave or even lay them off.

Workers making ladies footwear at a shoe factory. Companies in non-essential sectors have been forced to close during the MCO. — FilepicWorkers making ladies footwear at a shoe factory. Companies in non-essential sectors have been forced to close during the MCO. — Filepic

This, in turn, would affect the livelihood of these employees, push up the unemployment rate and cause the local economy to decline further.

“It may even result in an influx of court cases as unhappy employees take employers to court over unpaid wages or unfair dismissal.

“The state government needs to take urgent action to keep our people employed and our SMEs afloat, ” she said.

Chang said the 16 Special Relief Package announced by Abang Johari included plans to increase the micro-credit scheme fund from RM30mil to RM50mil.

“This is supposed to help SMEs by offering them a chance to apply for more loans. However, some employers may baulk at having to incur more expenses to apply for another loan just to pay staff wages. They would most probably just let the employees go, ” she opined.

Instead, Chang suggested the state government step in by offering a special scheme to help subsidise at least 50% to 80% of the salaries of employees, depending on the SME’s size and turnover.

On the extension of MCO, she urged the people to observe the strict rules about self isolation and social distancing to prevent the spread of Covid-19.

She urged supermarkets and grocery shops to provide delivery services to the elderly and/or single parents with small children.

They could also offer drive-through services to allow these customers to pick up their groceries without alighting from their vehicle, she said, adding that this would ensure social distancing was observed.

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