Don’t forget SMEs in tourism sector

PETALING JAYA: The second economic stimulus package does not address the needs of small and medium-sized enterprises (SMEs) in the tourism industry, says the Malaysian Association of Tour and Travel Agents (MATTA).

Its president Datuk Tan Kok Liang said failure to do so would cause 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, had seen revenues falling by a staggering 90% in March, adding that it was looking at a near-total loss in business for the months of April, May and June.

Tan said many businesses, especially SMEs, may have no choice but to start retrenching employees – a move, he claimed, would have a long-lasting ripple effect on many other industries.

“The stimuli announced by the government do 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, with the prospect of retrenchment looming, they’re essentially on their own, ” he said.

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

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

“There (was already) writing on the wall and yet it seems the government has all but ignored the desperate pleas of the business community in favour of 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 labour laws and a lack of any real financial relief, ” he added.

On Friday, Prime Minister Tan Sri Muhyiddin Yassin announced the government’s second economic stimulus package with a value of RM250bil.

The first was a RM20bil package announced by former prime minister Tun Dr Mahathir Mohamad on Feb 27.