GEORGE TOWN – Many businesses are expected to fold by next month as their operations have been hit hard by the movement control order (MCO) to contain Covid-19, said Tan Sri Richard Koh.
Koh, who heads a high-powered task force comprising 111 industry captains, told The Vibes that Putrajaya has to change its approach in the war against the coronavirus, adding that the MCO, which is in place for a second time, has caused irrevocable damage to service sectors, especially tourism.
“I do not think we can survive till year-end. After Chinese New Year, or next month, some of our members’ businesses will collapse. It is a matter of whether it is permanent or temporary.”
While other countries may be experiencing a similar trend, he said, the difference is that they have a proven social safety net to protect against widespread retrenchment.
What is needed is timely intervention by Putrajaya through strategic financial aid and reduced bureaucracy, he said.
Koh is expected to meet Prime Minister Tan Sri Muhyiddin Yassin today to convey the task force’s findings and recommendations.
Its 13-point memorandum, sighted by The Vibes, calls for, among others:
- The reinstatement of the automated bank moratorium, with a waiver on interest accrued from now until December 31 – with an extension of three months should the pandemic continue.
- A waiver on licensing and assessment charges for all businesses until year-end, and another for statutory payments, such as Employees Provident Fund and Social Security Organisation contributions, income tax deductions and foreign worker levy payments. Such deferments are needed until year-end.
- Power subsidies of up to 50% across the board, and for the wage subsidy to be raised from the present RM600 to RM1,200, anchored on the premise that the present minimum wage is set at RM1,200, whereas the median wage was RM2,308 as of last November.
- Soft loans to be accorded, with a need for quicker response from financiers in view of the cash-flow crunch that businesses may be suffering now.
- A single window or one-stop centre in collaboration with Bank Negara Malaysia to process, approve and disburse funds or aid previously announced by the government.
- Danajamin, the government’s financial guarantor, should be carved up to allow a special purpose vehicle to disburse funds to needy groups, such as micro and small businesses.
- A special relief fund based on the capital expenditure of companies in 2019 and last year, as well as rental relief, whereby landlords are given a tax incentive and bank interest waiver.
- Leeway for monthly tax payments, an extension for submission to the Companies Commission of Malaysia, and no introduction of new taxes, as such news will dampen the business environment and drive away foreign direct investments.
Koh said businesses welcome lockdowns to counter Covid-19, but such measures must be taken in a manner that does not end up punishing the entire community.
When done wrong, businesses would be forced to go underground, he said, risking a rise in illegal dealings, since most need to meet overhead costs ranging from loans to wages.
He suggested a targeted MCO in red zones, as what is done in Thailand and other neighbouring countries.
“In such localities, it is a total lockdown. Nobody goes in or out until the transmission chain is broken.”
He said Malaysia cannot afford nationwide travel restrictions, as these will affect the domestic economy.
“We need domestic consumption to drive the economy as there are no foreigners coming in because each country has banned overseas travel until their populations are fully vaccinated.” – The Vibes, February 9, 2021
