PETALING JAYA: Local businesses have expressed fears that they will be hit badly if all assistance provided by the government is halted in September.
Malaysian Employers Federation executive director Datuk Shamsuddin Bardan and SME Association of Malaysia president Datuk Michael Kang agree that an abrupt end to government assistance will hurt local companies.
Shamsuddin said when the government decided it would provide aid only until September, it must have felt the economy would recover by then.
“But the government has to consider extending assistance, including a moratorium on loans, until the end of the year,” he told theSun yesterday.
“Even the prime minister himself has said the tourism sector may take until 2021 to see a full recovery,” he added.
Shamsuddin pointed out that private businesses now face challenges in terms of cash flow.
Kang said it would take at least six months for small and medium enterprises (SME) to see some kind of recovery, as it has only been two months since businesses were allowed to resume operations.
He said business has dropped to 40% from pre-Covid-19 days, and companies need to hit at least 70% “to be on the safe side”.
Kang added that many companies will not be able to pay their staff if no help is forthcoming.
He said extending the loan moratorium by three to six months would help to ease the financial burden faced by SME.
“Retrenchment is a big possibility because companies may not be able to pay salaries. The government needs to consider measures that can ensure a soft landing for SME that are in trouble,” he said.
Kang estimated that up to two million people could be jobless if no more help is forthcoming from the government.
“Some SME may be forced to close down. The fact that many are not able to pay the rent for their business premises is evidence that they are in trouble.”
