FMM calls for further relaxation of stimulus package measures

30 Mar 2020 / 15:48 H.

PETALING JAYA: The Federation of Malaysian Manufacturers (FMM) has called for the relaxation of some measures introduced in the Prihatin Rakyat Economic Stimulus Package to help ease the immediate cash flow and financial constraints of businesses due to the Covid-19 and movement control order.

FMM president Tan Sri Soh Thian Lai requested for the relaxation of conditions for the six-month moratorim on loan repayment, urging the central bank’s further intervention to ensure consistency across all financial institutions in the treatment of interest during the moratorium period.

“Banks should not compound interest but rather waive or reduce the interest during the moratorium period to further assist companies affected,“ he said in a statement.

On the RM50 billion Danajamin guarantee scheme, Soh hopes that banks will fully assist affected companies with reasonable interest charges and focus on saving the financially distressed companies from folding with easier complied conditions, since the government provides guarantee and with low interest.

On the RM5 billion special relief facility for SMEs, Soh opined that the interest could be further reduced to 2% and lending conditions be lessened, including the strict collateral requirement.

Soh said the RM5.9 billion wage subsidy programme should be doubled to RM12 billion as the allocated amount is not sufficient since it is estimated to only cover 3.3 million workers.

“The RM600 wage subsidy introduced should have been extended to all employees regardless of wage level; and the subsidy should be automatic without the need for companies to prove reduction in earnings by 50% as all companies would be experiencing a significant reduction on revenue and sales. In fact, FMM had proposed for a 30% wage subsidy by the government on a tripartite shared basis with employers and employees.”

FMM has proposed a complete exemption or a reduction in the employer contribution to the Employees Provident Fund until end of December 2020 instead of the current announced deferment/restructuring/rescheduling option of payment.

“The current initiative of deferment would still tie employers down financially as they focus on their respective business revival plans to ensure business viability and continuity and keeping jobs in the next six months to a year.”

Soh also pointed out that the increase in electricity discounts appear to only benefit domestic and low voltage users while the major industrial and large users including the medium and high voltage customers would not benefit much from the discount.

“With the disruptions to operations and the anticipated further slowdown in business in the coming months, FMM appeals to the government for all industrial power users irrespective of the kilowatt usage a month get at least a 15% discount in electricity for the next six months.”

Meanwhile, FMM proposed that the government introduce a special soft loan scheme of RM5 billion with a low 2% interest rate for companies to cover the fixed capital payments such as rents and utilities as well as administrative payments including salaries during this period.

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