KUALA LUMPUR – Keeping unemployment low by helping small and medium enterprises retain their workers through wage subsidies and loan moratoriums during the Covid-19 pandemic is the first line of defence in helping households, said Asia Analytica.
The research and institutional services provider said the sector forms the backbone of the economy and generates substantial employment.
The government’s wage subsidy scheme, aimed at preventing retrenchments, has wide-reaching effects for SMEs, as it caters to large numbers of up to 500 employees per firm and runs for well over a year, the consultancy was quoted as saying by The Edge.
“The wage subsidy applies to SMEs that have generally suffered at least a 30% decline in income.”
It said each SME receives a subsidy of RM600 per month for each worker earning below RM4,000, for up to 500 employees.
“Note that the wage subsidy was as high as RM1,200 per person under the first scheme in Prihatin, and the RM4,000 salary cap was dropped under the Economic Recovery and People’s Protection Package (Pemulih).”
Asia Analytica estimates that the sector will receive a total of 13 months’ subsidies in the 21-month period from April last year to this December under six economic packages, namely Prihatin, Penjana, Kita Prihatin, Permai, Pemerkasa Plus and Pemulih.
In theory, it said, an SME with 500 employees can enjoy a subsidy of RM300,000 per month for 13 months.
“SMEs in selected, adversely affected sectors will get an additional six months of wage subsidies, or a total of 19 months.”
It said this strategy is to help companies sustain themselves and keep their workforce, and that the focus is on restructuring their debt repayments to allow sufficient liquidity and cash flow. – Bernama, July 5, 2021
