PETALING JAYA: Loan moratorium, wage subsidy and discounts on utility bills are among the initiatives a major business group wants the government to introduce to help companies survive the two-week lockdown.
In a statement, the Federation of Malaysian Business Associations (FMBA), which comprises a coalition of business groups, said they welcomed the total lockdown which begins on June 1 owing to the worsening Covid-19 situation.
But it said this will bring domestic demand to a halt and have an impact on unemployment, disposable incomes, and investments.
So, FMBA proposed five initiatives the government could take to mitigate the economic risks of the lockdown, namely, an automatic loan moratorium, financial support, wage subsidies, statutory exemptions, and subsidies on utilities.
The association called for the loan moratorium to be similar to that given last year, but this time with zero-interest, and to be extended for seven months, that is until Dec 31.
“It must also include credit and leasing companies, which were not included during the first movement control order (MCO) moratorium.”
It added that only businesses which remained fully operational, like those in the manufacturing, healthcare, and rubber gloves sector should be excluded.
According to FMBA, publicly available data shows the top eight local banks made a total of RM93 billion in profit over the past three years.
“So, given the first moratorium costs banks only RM6.4 billion, another moratorium would only cost banks a fraction of their profits.”
The association also called for soft loans to be given to businesses, and a six-month wage subsidy programme for all industries except those which remain operational.
Under their proposal, FMBA wants a 70% wage subsidy for all staff earning less than RM4,000 and a 30% subsidy (capped at RM3,000) for those who earn above RM4,000.
“(Also) freeze all statutory requirements until Dec 31. This includes, but is not limited to, EPF, Socso, Employment Insurance System, sales and service tax, quit rent, assessment, Companies Commission Of Malaysia submissions, Inland Revenue Board instalments, and foreign worker levy payments among others.”
FMBA also proposed that a 50% discount be given on telecommunication and broadband bills, with non-essential businesses also allowed a 100% waiver for three months.
The finance ministry is expected to announce financial aid for the people and businesses affected by the total lockdown soon.
Earlier this month, with the number of Covid-19 cases on the rise, FMBA said it supported “lives over livelihoods” and that its members were “ready to bite the bullet for the sake of the nation and the people.”
They also called for the National Security Council (MKN) and other relevant authorities to work with the private sector in drawing up tightened SOPs.
FMBA represents 262 business associations and chambers of commerce, comprising 950,000 companies from different sectors, and which employs more than seven million people. - FMT
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