It’s now time to prepare for a post-Covid world
Saving and creating jobs is the top priority, with emphasis on technology
BATTLING and controlling the Covid-19 outbreak has come at a tremendous cost to individuals, companies and even the government.
The economic repercussions are there to be seen. Malaysia managed to avert a contraction in the first quarter of this year but make no mistake, the extent of the pain is starting to be felt.
Car sales in April were essentially zero, save for some late registrations, and loan applications by households saw a big plunge of 41% in the same month.
The credit and demand indicators have grounded to a halt as the government instituted the movement control order to stop the rise of infections.
Now it is time to get things started again, and that is exactly what has been announced in the Short-Term Economic Recovery Plan.
The headline numbers read like a miniBudget – RM35bil in total with a RM10bil direct fiscal injection of cash by the government.
This will add to more strain on the fiscal deficit, but now is not the time to worry about financial ratios.
Saving and creating jobs is the priority. Also as people have now become accustomed to the new normal, it is also time to go digital technology to get things done where it can.
The sequence of the measures announced also show the gravity of importance.
The government said it was spending RM9bil for the benefit of three million workers.
The money spent on wage subsidies and the RM260bil original stimulus plan has meant saving about 2.4 million jobs, helped with the cashflow needs of 11 million people and supporting more than 300,000 companies.
The wage subsidy scheme, like many others announced yesterday, will continue to bring aid and help the still vulnerable worker as the unemployment rate is projected to surge to 5.5% and see 800,000 Malaysians out of a job.
Making things harder for those out of work is the limited scope where they have an opportunity to find new employment, and that is where the Plan comes in to soothe their concerns.
The employment portal under Socso will be upgraded to make known where the valuable jobs are available.
Companies hiring unemployed people will be given help in the form of a wage subsidy. Those aged above 40 will receive a larger cushion from the wage subsidy as it is that group that has more commitments and
The money spent on wage subsidies and the RM260bil original stimulus plan has meant saving 2.4 million jobs, helped with the cashflow needs of 11 million people and supporting more than 300,000 companies.
needs, given the family units they have to support.
Re-skilling and training will also feature, along with creating and maintaining jobs in the gig economy.
Incentives were also given to employers should their workers work from home. Here is a move that reward companies for embracing the new normal.
There were various other social safety nets announced when it comes to childcare and transportation but the measures announced also meant the government was serious in getting consumption going again.
The Sales and Service Tax was cut or waived for imported and locally built cars, and the government also relaxed requirements when it came to the housing sector.
These two segments of the economy have large linkages to the economy and will encourage those who have the means to buy a car or a house.
The purchase of big ticket items is hugely critical in revitalising the economy.
The same with the Buy Malaysian campaign. Getting Malaysians to support local companies will mean better prospects for those companies, which will translate to better job and income opportunities.
SMEs were also handed a number of measures to support their funding and transformation needs. The government also put in measures to attract large multinationals with long tax holidays with blanket incentives.
The trade war between the United States and China has led to opportunities to attract companies looking to relocate. Other Asean countries are doing the same and this is a chance we must not let pass.
There was also special mention for the tourism sector, which has been devastated by Covid-19.
The hope of additional money and tax exemptions and relief can help tide things through until conditions improve.