Bersatu Youth worried RM600 incentive not enough to prevent retrenchments

CORONAVIRUS | Bersatu Youth has welcomed the government's stimulus plan as a relief for the economic downturn brought about by the Covid-19 crisis but expressed concern that measures specifically for businesses may not be enough to prevent retrenchments.

Apart from direct cash transfer and postponement of loan payments, the stimulus plan will offer RM600 wage subsidy for workers earning under RM4,000 if a company's profit has fallen by at least half since the start of this year. 

The monthly subsidy for three months is on the condition a company does not force its workers to go on no-pay leave or retrench them.

Bersatu Youth chief Syed Saddiq Syed Abdul Rahman (above) said the RM600 subsidy only makes up 15 percent for someone earning RM4,000 a month.

"Is the RM600 subsidy enough for an employer that hires 10 staff at RM4,000 each? If we compare to Singapore, it is offering 25 to 27 percent in wave subsidy based on how serious the impact from Covid-19 a business has suffered," he said in a statement.

Syed Saddiq said at present, the companies are more willing to ask its workers to go on no-pay leave as observed in the airline industry.

The government's primary focus must be to ensure that the industries maintain their human resource.

"The main concern is if employers have no choice but to retrench their workers, it could spark a vicious cycle where they later may not have the financial strength to rehire which will further impact their businesses," he said.

In the overall, Syed Saddiq acknowledged the stimulus plan will help to shoulder the burden faced by Malaysians during the Covid-19 outbreak.

The Muar MP also asked the government to clarify if the RM200 one-off aid for university students also applies to students undergoing technical and vocational education training.

"We hope that TVET students will be included in the RM200 cash aid. We must be consistent in uplifting TVET students as they are the backbone and future of the country's industries," he said.

Syed Saddiq also urged the government to impose fair preconditions on the RM50 billion guarantee scheme for up to 80 percent loan taken businesses to finance working capital requirements.

"Bersatu Youth hopes that there will be bipartisanship among all political parties, the federal government as well as state governments in the implementation of the Prihatin National (stimulus plan) so that it can reach all the target groups," he said.

Under the movement control order (MCO), non-essential businesses and services are ordered closed and people are discouraged from leaving home except for pressing reasons such as to restock on food supplies.

The move is aimed at curbing the spread of Covid-19 but has also brought a large part of the country's economy to a standstill

The MCO, which was initially set to end on March 31, has been extended to April 14. - Mkini