MP proposes rental relief fund to help SMEs survive Covid-19

 

Klang MP Charles Santiago has proposed that the government subsidises rental costs for small and medium enterprises (SMEs) to enable them to survive the Covid-19-stricken economy.

Calling it a “rental relief fund”, he called on Putrajaya to allow each struggling SME to apply for up to RM8,000 per month for a period of six months to cover such costs.

Speaking at an online press conference this morning, Charles said the idea of the fund came from his conversations with struggling business owners.

“(In) talking to them, what we clearly realised was that they are finding it difficult to pay rent. And that is because rent constitutes 20 to 30 percent of their operating costs. 

“Given the movement control order (MCO) and conditional MCO, their business has dropped tremendously... this is one problem that we need to investigate and we need to ask the government to support the rental relief fund,” he added.

Without help, he said, many SMEs - which form 98.5 percent of the domestic economy - would not be able to sustain operations as spending power remains low.  

Charles said he is slated to meet Finance Minister Tengku Zafrul Abdul Aziz on Monday (Dec 14) about his plan.

The DAP lawmaker also intends to put forth his proposal in the Dewan Rakyat next week, when the government tables the Temporary Measures for Government Financing (Covid-19) Bill 2020 for second reading.

The bill proposes an additional RM20 billion of taxpayers' money to be allocated for Covid-19 relief expenditure.

“We are asking for something like RM1 billion as part of the support for rental relief,” he added. 

Businesses want rent help

During the press conference, Charles was flanked by six representatives from various industries who supported the rental relief fund proposal.

All hoped that the Perikatan Nasional government could consider the idea as rent is a significant and fixed operating expense at a time when many businesses are experiencing a significant drop in revenue.

Sole proprietor Diccam Lourdes shared how he had exhausted his and his family’s savings to keep his clothing business in Kuala Lumpur alive.

Even after laying off two of his five employees and borrowing money from a “loan shark”, he has not been able to repay the RM32,000 in rent he owes.

“Our business depends on functions - weddings, birthdays and corporate events... not many people are going to functions now and there are not many orders.

“There has been a 70 percent reduction in orders, so whatever business (we get) is just to pay for my staff,” Lourdes said, adding that he will have to shut his business by the end of the month should he fail to pay the rent.

Meanwhile, Malaysia-Singapore Coffeeshop Proprietors General Association president Ho Su Mong said some members were suffering as much as a 60 percent drop in sales and were struggling most with rent.

More than 3,000 of his 20,000 members have closed their coffeeshops since the MCO was first imposed, he added.

Malaysia Hairdresser Association chairperson Michael Poh similarly warned that many salons and barbershops risked closure partly due to the inability to afford rent.

“With no rent help, I think 50 percent of businesses in our hair industry will close their shops. At this moment, it is rising up to 30 percent already,” Poh said.

Existing aid not enough

Malaysian Indian Restaurant Association chairperson T Muthusamy contended that help with rent was needed despite existing government initiatives like wage subsidies and tax breaks for property owners who waive or reduce rent for tenants.

He noted that not all SMEs qualified for those initiatives, pointing to how restaurants that employed foreign workers were not eligible for wage subsidies.

With a rental relief fund, Malaysian Medical Association honorary general-secretary Dr R Thirunavukarasu opined that help would be targeted at affected SMEs and they would not have to rely on property owners to reduce rent.

Malaysian Pharmaceutical Association chairperson Amrahi Buang, meanwhile, pledged his organisation’s support for the fund and hoped for bipartisan support. - Mkini