Shift to outcome-based assistance for SMEs, says association

 SME Association of Malaysia says the 2027 federal budget should not simply announce large grant allocations.

SME Association of Malaysia president Chin Chee Seong said government support must produce measurable improvements in productivity, investment, growth and competitiveness.

KUALA LUMPUR:

The SME Association of Malaysia has urged the government to shift towards outcome-based assistance for small and medium-sized enterprises (SMEs) in the 2027 budget instead of simply announcing large grant allocations.

The association’s president, Chin Chee Seong, said federal support must produce measurable improvements for businesses.

“Our concern is no longer simply whether assistance exists. The real questions are whether the assistance reaches SMEs, and whether it produces measurable improvements in productivity, investment, growth and competitiveness,” Chin told a press conference today.

He said the 2027 budget should provide financial support tailored to each stage of a company’s growth, covering areas such as daily cash flow, factory upgrades, artificial intelligence, green practices, and overseas expansion.

The success of aid initiatives should ultimately be evaluated based on concrete operational outcomes, such as whether a business successfully automates its operations, improves productivity, exports goods, or expands into regional markets, he said.

To strengthen domestic direct investment, Chin called on Putrajaya to incentivise local businesses to reinvest and expand, and encourage GLCs, government-linked investment companies, and institutional investors to co-invest alongside promising local SMEs.

The association warned that local businesses are already facing mounting operational costs, including rising labour expenses, higher utility bills, financing charges, an expanded scope of the sales and service tax, e-Invoicing requirements, licensing fees, and compliance costs.

To prevent further strain on business continuity, Chin proposed that the government conduct a comprehensive cumulative cost and regulatory impact assessment for SMEs before introducing major policies that increase business expenses.

The calls follow a recent survey by the association which found that 61.6% of SME respondents viewed current business conditions as worse than 12 months ago, while nearly half opposed further increases to the minimum wage until productivity improves. - FMT