MATTA: Second stimulus package fails to protect tourism SMEs

  • Nation
  • Saturday, 28 Mar 2020

PETALING JAYA: The second economic stimulus package announced by Prime Minister Tan Sri Muhyiddin Yassin has failed to address the key issue of protecting jobs and helping tourism SMEs, says Malaysian Association of Tour and Travel Agents (MATTA).

Its president Datuk Tan Kok Liang (pic) said the economic stimulus package failed to meet the needs of tourism enterprises, especially small and medium-sized enterprises (SMEs) and has also failed to address problems of employee retention.

"What will happen after the handouts are fully given out by May when employees find themselves out of a job because the businesses they used to work for have been forced to close shop?” he asked.

Tan noted that the tourism industry which employs 3.5 million people and contributes 15.2% to the nation's GDP has seen revenues fall by a staggering 90% in March, adding that it was also looking at a near total-loss in business for the months of April, May and June.

He added in a press statement on Saturday (March 28) that many businesses - especially SMEs - may have no choice but to start retrenching employees and added that this move would have a long-lasting ripple effect on many other industries.

"The stimuli announced by the government does not address the fundamental needs of businesses and will eventually result in companies having to lay off employees in order to stay in business.

"At this point in time both employers and employees are willing to compromise to keep people employed but the government is making it somewhat 'difficult' for everyone.

"For instance, EPF contributions are only 'deferred' and even then 'subject to approval'. Even the RM600 staff retention subsidy has questionable eligibility criteria. From the way it looks, employees can look forward to some small relief in April and partly in May but after that they're essentially on their own, with the prospect of retrenchment looming," he said.

Tan said tourism businesses have indicated a possible downsizing of staff from anywhere between 70 to 90% over the coming few months in order to simply survive, adding that many tourism businesses are hesitant about taking up any additional loans for fear that they would be saddled with more debt as recovery is expected to take a much longer than expected time.

“Even before the movement control order (MCO) came into effect, the travel and tourism industry which was hardest hit along with other related businesses were already struggling to stay afloat.

"There (were already) "writings on the wall" and yet it seems the government has all but ignored the desperate pleas of the business community in favour or projecting big numbers without any true substance.

"Based on the recent announcement it seems as though businesses are still required to bear the brunt of the economic fallout; handcuffed by inflexible and unyielding labor laws and a lack of any real financial relief," he said.

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