Yoursay: Distressed SMEs – should gov’t save them or let them die?

YOURSAY | ‘If they cannot pay their employees, then we will have a much bigger problem…’

The reality of Muhyiddin’s Makcik Kiah

Wakandan: When I heard Prime Minister Muhyiddin Yassin used the Makcik Kiah example, I was laughing at the plain simplicity of an explanation to a complex subject.

But then I was thinking, perhaps this was the kind of language that some people would know and understand.

In retrospect, it is either that the people do not understand what the stimulus package is all about but are just happily receiving what they are supposed to receive, or it was one big front for a giant scam to feed the famous and the rich.

A big outlay such as the stimulus package should be doled out in utter transparency. As it is now, we actually do not know where the bulk of the RM250 billion go.

Banks such as Bank Simpanan Nasional (BSN) were allocated millions but how will these banks disseminate the cash flow? Who will receive them? And how? What would be the criteria or will it be at the whim and fancy of the little Napoleans there?

The handouts, such as to Makcik Kiah, are only to ease the burden for just one day, forgetting about the months ahead.

Then there is the bonus for civil servants and pensioners, whose incomes are not affected unlike that of Makcik Kiah.

The stimulus package, as it is the practice of the former BN government (PN is just BN in a different package), will be just another wastage with very little really being spent on what matters.

The private sector, the small and big businesses, which are affected the most, seemed to be marginalised by the PN government in the stimulus package.

If they cannot pay their employees, then we will have a much bigger problem than what our civil servants and pensioners are facing.

Anonymous #33227154: During the good times, the businesses make a lot of profit and their owners, directors and top management get fat bonuses. They should keep a healthy reserve for their businesses in times of crisis.

Therefore, the government should not help businesses so much during bad times. The country's money should be channelled to help lower-income people instead.

Businesses that are sound, prudent and stable will survive well, but many of the hollow, shell businesses who only survive on loans or cronyism will fail. Let them be weeded out.

Anonymous 2043581479977820: In any situation, it’s always easy to champion the plight of the B40 (bottom 40 percent). It is, after all, a huge vote bank for the politicians.

Has the government bothered to find out why 40% of our population fall into the low-income category? Yet we have by some reckoning more than four million foreign labourers in all sectors of our economy. Why?

These foreigners obviously consider Malaysia a good place to "cari makan" (earn a living). They work their butts out and send money monthly to their love ones in their home country.

Yet we have 40% of our population earning below or at the margins of poverty. This, I cannot understand. Is it because our people are so dependent on government handouts that they have remained complacent?

So naturally when a calamity like Covid-19 hit, people like Makcik Kiah have no reserves to rely on. Anyway, I think the support for the B40 fall far short. It should be for at least six months of sustenance.

But more importantly, the SMEs which are the backbone of the economy are not taken care of. It is asinine to say "dig into their reserves".

When there is no work or business, any sane business person will reduce or cut off his or her variable costs of which labour cost is often a large component, and hence first to go.

On top of that, the business owner has to reckon with other more fixed cost like rents and debts servicing that the business had depended on.

How about payments to suppliers when you have no working capital because you had no sales and your stocks are piling up in the warehouse? Can your reserves take this for the next three to six months?

If you do not save the SMEs, you are going to get a lot more people out of work. The Australian and most Western governments recognise this and their stimuli packages amply provide for business owners.

So, whilst you take care of the likes of Makcik Kiah, don't forget Encik Rahman who owns a seatbelt manufacturing company supplying to locally assembled cars or Mr Lee who owns an injection moulding factory.

Encik Rahman has 70 Malaysian staff whilst Mr Lee has 30 Malaysian staff. Now assuming all their staff are sole breadwinners in a typical family of five persons, that’s 500 people welfare taken care of if the government help saves Encik Rahman's and Mr Lee's businesses.

The multiplier effect of the financial assistance to both these businesses will be quite phenomenal as the funds will be deployed to pay their input suppliers, who will in turn have funds to meet their own costs components and that's how you get the economy going.

SMEs are time-bombs in the nation's economy

PWCheng: The government must think of feasible ideas to help the SMEs as they are the lifeline to our economy and which provide jobs for the rakyat.

They had been contributing faithfully to LHDN (Inland Revenue Board) all these while to sustain government expenditures. Subsidising the salary of employees who earn less than RM4,000 with RM600 for three months and with so many conditions attached will not help much.

I suggest a subsidy of RM1,000 for those earning RM1,200 to RM2,000 and a subsidy of RM1,500 for those earning RM2,001 to RM4,000 for six months. All rentals should come down by 50% with the government subsidising 25% and landlord subsidising the other 25%.

On the other hand, all government employees and pensioners should not get anything extra as they have not been deprived of anything. I am a government pensioner myself and I think there is no necessity to pay anything extra for government servants and pensioners. We have to sacrifice in bad times like this.

Most importantly, right now we have to do everything possible to prevent the loss of jobs among our working citizens.

Anonymous 2403211456991397: We live in a market economy and the hard truth is that those who cannot manage their cashflows will always be wiped out. Covid-19 or anything else, it would just be a matter of time.

P Ramlee: I think we need to speak with data. In 2018, SME contributed to 38.3% of Malaysia GDP so I wonder who is going to fill this GDP gap if we allow them to die of Covid-19? - Mkini