PM announces RM35 billion stimulus plan in latest bid for economic recovery
Prime Minister Muhyiddin Yassin today unveiled a RM35 billion stimulus package to help the economy recover from the impact of Covid-19 and the subsequent movement control order (MCO), which saw the majority of businesses shut down for weeks under restrictions on public activities. Free Malaysia Today reports:
Of this, RM10 billion will be in the form of direct fiscal injections.
Billed as a short-term economic recovery plan (ERP), the package titled “Pelan Jana Semula Ekonomi Negara” or “Penjana” was established with three main goals: to empower the people, propel businesses and stimulate the economy.
There are 40 initiatives covering these goals, with emphasis given to supporting workers and small and medium-sized enterprises (SMEs) through training programmes, social support, financing schemes, boosting domestic consumption and supporting industries impacted by the outbreak and MCO.
Penjana is the government’s latest initiative to cushion the impact of the virus and its lockdown measures.
Putrajaya previously allocated RM260 billion through the Prihatin Rakyat stimulus package which included bank loan moratoriums, cash aid and loans for businesses.
The ERP is the fourth of six economic recovery phases: resolve, resilience, restart, recovery, revitalise and reform.
The revitalise phase will come under Budget 2021.
To tackle the problem of unemployment, Muhyiddin said the government would allocate some RM9 billion for three million workers through several initiatives including RM5 billion to expand the wage subsidy programme.
Adding that the programme had been well received by employers and workers alike, he said it would be extended a further three months beyond its original time frame of three months.
This initiative will be set at RM600 per worker for up to 200 workers per company.
“For tourism sectors and others which have been closed during the MCO, companies can apply for the subsidies,” he said.
He also announced RM1.5 billion for hiring incentives which is expected to benefit some 300,000 through two incentives: RM800 a month for each worker under the age of 40 hired and RM1,000 a month for workers above the age of 40 or those who have special needs.
This incentive will be provided for six months.
To help those who are unemployed increase their skills, those who have lost their jobs can claim training allowances of up to RM4,000 under Socso even if they do not contribute to the Employment Insurance System.
For the youth, incentives of RM600 a month will be given to employers who provide apprenticeships to fresh graduates.
The government will also allocate RM2 billion for upskilling programmes for the youth and unemployed. This is expected to benefit over 200,000 people.
For the youth, this includes placement and training at selected institutions as well as subsidies for training.
For those who are jobless, meanwhile, the government will conduct upskilling programmes for critical industries such as electrics and electronics, IT and communications. It will also provide short-term learning incentives.
Gig economy and SMEs
Muhyiddin said the government would also allocate RM50 million in matching grants for companies in the gig economy to make Socso and EPF contributions for their workers.
He said the government would set up a special committee chaired by the ministers of finance and human resources comprising leaders from the public and private sector to monitor initiatives related to workers.
“In line with the government’s call to encourage SMEs to implement work-from-home practices, insurance coverage and tax incentives will be provided,” he added.
“For example, tax exemptions of up to RM5,000 for workers who get a tablet, computer or smartphone from their employers.”
Muhyiddin added that daycare centres could apply for grants to help them comply with government SOPs, while e-vouchers would be provided for online nanny services as well as tax incentives for childcare fees of up to RM3,000.
Transport, OKU and single mothers
To reduce the cost of public transport, the government will also introduce the MY30 programme where people pay RM30 a month or RM1 a day for an unlimited travel pass under Prasarana in the Klang Valley.
“This is open to all citizens,” Muhyiddin said, adding that it would remain in effect from June 15 until the end of the year.
Some 300,000 special needs individuals or OKU as well as single mothers who qualify for aid under the welfare department will get one-off aid of RM300 before Hari Raya Aidiladha.
Muhyiddin also announced an initiative called “GLC Penjana Komuniti” which will see GLCs “adopting” a community and developing its socio-economic capabilities.
He said the Peka B40 scheme would also be enhanced with an additional RM50 million for health screenings and new equipment.
The government with the cooperation of telcos will also provide internet connectivity with speeds of up to 1GB capacity free of charge each day from 8am to 6pm until the end of the year for purposes related to education and teleconferencing.
Muhyiddin said the government understood that businesses had been struggling with cashflow issues and reduced demand. He assured that they would help all businesses regardless of size through various initiatives.
These include an initiative called Shop Malaysia Online, to encourage online shopping through the provision of promotion codes, among others.
RM70 million will also be allocated for matching grants, and a further RM700 million to help SMEs digitalise their operations.
RM1 billion will be allocated to support SMEs in the tourism sector, while RM400 million will be allocated for the support of microbusinesses. Another RM500 million will be allocated for loans to Bumiputera entrepreneurs.
Muhyiddin also said tax incentives would be extended for companies purchasing equipment such as PPE and thermometers.
The government will also give income tax rebates of up to RM20,000 for three years for SMEs set up between July 1 and Dec 31 this year.
To encourage competitiveness, it will also provide stamp duties on mergers and acquisitions to form new SMEs.
RM100 million meanwhile will be allocated for an initiative called the “National Technology and Innovation Sandbox” to explore new technology and innovations.
The government will also start a “Buy Malaysia” campaign to market local products and a dedicated e-marketplace platform for such products.
To encourage cashless payments, the government will credit RM50 into e-wallets which will be matched by RM50 in vouchers and cashbacks.