Business sector shares proposals

PETALING JAYA: Businesses are appealing to the government to help reduce their operating costs, including temporarily suspending fees, ahead of a stimulus package to mitigate the impact of the Covid-19 outbreak on the economy.

SME Association of Malaysia president Datuk Michael Kang suggested that the government provide special and easier approval for loans to small and medium businesses to overcome cash flow issues.

“We should also encourage Malaysians to visit local tourist spots like Langkawi and Labuan to further stimulate the local economy.

“The government can also come up with special subsidies for local tours and travel agencies and hotels to keep businesses afloat.

“If the locals do not support our own businesses, there will be no income for industry players,” he said when contacted yesterday.

Kang said many industries were reeling from the Covid-19 outbreak, especially the tourism, services and manufacturing sectors.

“We rely a lot on China and we are not sure how long this will last,” he said.

Malaysia-Singapore Coffee Shop Proprietors General Association president Datuk Ho Su Mong said there had been a 50% reduction in business since January.

The association is appealing to the government to reduce the business licence fee for food and beverage proprietors.

He also hoped state governments would reduce levy charges on businesses.

“Many of our members place tables at five-foot ways and they need to pay a certain amount per table, so we hope the local government will reduce these charges.

“We also hope the government won’t introduce new laws or rules that will affect our industry, such as restricting the public from drinking (alcohol) in shops,” he said.

Ho also hoped Pahang, Johor and some northern states would temporarily suspend the increase in quit rent.

“The quit rent increase is quite high, some by 100% to 200%.

“So we hope that for the time being, the Finance Ministry can give directives to suspend this,” he said.

Malaysian Employers Federation (MEF) president Tan Sri Azman Shah Haron proposed that the government defer the implementation of the minimum wage of RM1,200 per month until the industries could return to normal.

The monthly minimum wage was increased from RM1,100 to RM1,200 in 57 city and municipality councils from Feb 1 this year.

In a letter submitted to Prime Minister Tun Dr Mahathir Mohamad earlier this month, MEF had also appealed for the government to reduce levy contribution to the Human Resources Development Fund (HRDF) from 1% to 0.5%.

MEF also hopes that the government will reduce the employers’ and employees’ statutory contributions by 2% to the Employees Provident Fund (EPF).

“This will reduce the cost of doing business and increase disposable income of employees to boost up their purchasing power,” said Azman.

He also hoped the government would defer proposals to amend labour legislation which would further increase the cost of doing business.

Federation of Malaysian Manufacturers (FMM) president Tan Sri Soh Thian Lai said the economic stimulus package would spur increased confidence for investors in terms of foreign or domestic direct investments.

“It will demonstrate the government’s seriousness to mitigate the impact of the Covid-19 outbreak,” he said.

A survey conducted by the Associated Chinese Chamber of Commerce and Industry Malaysia (ACCCIM), among its members showed that 82.1% of the 331 respondents projected that sales between January and March this year would be badly affected.

“In addition, 42.4% of respondents anticipated sales will drop by more than 20%.

“Tourism-related businesses will be the hardest hit with more than half (55.2%) expecting sales to plunge by more than 20%, ” said the chamber.

ACCCIM also urged the International Trade and Industry Ministry to closely monitor the external trade sector and to assist companies, especially small and medium businesses, if they faced disruption in the supply chain.

ACCCIM said the outbreak, should it prolonged for six months, could bring down sales by more than 30% for 84.5% of the respondents.

The chamber had appealed to the government, among others, to set up a tourism relief fund, business disruption relief fund, and proposed a one-year exemption on tourism tax, service tax on accommodation and departure levy.

Prof Dr Yeah Kim Leng, an economist with Sunway University, hoped the economic stimulus package would ensure a “Malaysians helping Malaysia” approach to spur domestic demand.

“It is certainly very apt and in accord with the key economic principle of stimulating domestic demand to offset the external shocks emanating from China’s economic slowdown as it battles the Covid-19 outbreak,” he said.

He said domestic tourism should be promoted more effectively as this sector would benefit from domestic spending.

He noted that domestic tourism would also benefit from a lower fear factor over Covid-19 as the outbreak in the country is under control.

“A stimulus package that includes incentives and support for airlines, travel and tour agencies, hotels and restaurants as well as food, beverage and retail outlets to offer promotional packages is one way to spur domestic tourism and consumer demand in the sectors,” he said.

Yeah said the government should also provide special tax relief, concessionary loans and flexible loan repayments for businesses and firms hard-hit by the outbreak.

“In turn, the resuscitated firms and businesses will be able to contribute back to the government and society in maintaining employment and paying income taxes when the economy turns around,” he said.

Universiti Tun Abdul Razak’s graduate school of business professor Dr Barjoyai Bardai said it is a good time for the government to introduce “pump priming” measures, which is to take action to stimulate the economy through government spending, interest rates and tax reductions.

Barjoyai said the government had been spending on capital expenditure for development projects.

“It should also focus on soft skills or human resource development.

“This is the time for public and private sectors to be investing in long-term human capital development so they should be investing in retraining, reskilling, realigning academic curriculum, and this is where the government can provide the subsidy.

“When the government gives subsidies through HRDF, it will provide long-term benefits and at the same time generate income for people like trainers,” he said.

Barjoyai however hoped the government would not repeat its mistakes made in previous stimulus packages such as for the Severe Acute Respiratory Syndrome (SARS) outbreak in 2003 and during more recent economic financial crisis.

In 2003, the government introduced a RM8.1bil economic package to check the impact of the SARS epidemic.

Barjoyai said it was not right to provide incentives only for businesses so they could retain their profit margins as they are expected to experience higher or lower profits.

He said assistance should also help to promote local tourism to other regions apart from China.

Prime Minister Tun Dr Mahathir Mohamad will unveil the economic stimulus package next Thursday to mitigate the losses so that affected businesses can continue their operations and be ready to reap the benefits when the economy rebounds.

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