Bitter budget after-taste for Sabah, says employers group

 

The state’s natural resources sector has been given a boost through the 2021 budget but high-value downstream industrialisation has not.

KOTA KINABALU: The Sabah Employers Association has expressed mixed feelings over the 2021 federal budget, saying it has missed the mark for the state particularly in terms of stimulating business activities.

Its president Yap Cheen Boon said the budget did not allow Sabah based-businesses to breathe easily in the days ahead.

He said the budget was based on statistics dating from August, and made generous assumptions about business conditions ahead.

“What happens if the last quarter for this year shows a deteriorating situation, especially for Sabah?

“This is highly probable. The restrictions of the conditional movement control order (CMCO) in the state are the most stringent of all; with struggling businesses only allowed to operate at 50% capacity in the face of high infection numbers,” he said in a statement today.

Yap said this meant a longer recovery period next year for Sabah compared to other states, hence, the need for businesses to be supported at all costs, and to preserve jobs.

But the two major helplines for small- and medium-sized enterprises (SMEs) – loan moratorium and wage subsidy – have not been continued, he said, with instead the targeted approach being taken, despite showing severe inconsistencies in its approval process.

He said the budget would leave “a bitter taste” for those in a supporting industry to tourism.

“No loan moratorium, no wage subsidy, irrelevant 1% tax cut and inapplicable hiring incentives when one’s focus is only to downsize and survive. The budget missed the mark for Sabah.

“Granted its natural resources sector has been given a good boost but high-value downstream industrialisation has not. It is hard pressed to see Sabah’s manufacturing contribution progressing from the current 7% to the aspired 30%, creating more high pay job opportunities for locals,” Yap said.

He added this would defeat the objective when locals are upskilled via job skills incentive through the Sabah Economic Development and Investment Authority but in the end are left without high paying job openings offered to them.

He questioned whether budget consultations with business sectors had included Sabah SMEs at all. - FMT