Stop spending money on political coups to bring down PH/Warisan State Governments but focus on expanding financial aid to small businesses, workers’ salaries and extending loan moratorium by 6 months to save small businesses from bankruptcy and jobs losses

DAP expresses deep disappointment at the PN Government’s unreasonable refusal to extend the existing moratorium on bank loans by another 6 months when it expires on 30 September 2020, which will help 7.7 million individual borrowers and 245,000 small and medium entreprises(SMEs). No reason has been given by Prime Minister Tan Sri Muhyddin Yassin.

Such stubborn refusal is regrettable when the cost is small relative to the benefits, banks had lost a total of RM6.4 billion since the implementation of the 6-month moratorium. This is a small price to pay for the banking industry when it earned an estimated RM32 billion in after-tax profits for 2019.(see attached)

RM 32 billion in after-tax profits for 2019 should provide sufficient cover for banks to bear the RM6.4 billion cost of delivering on their corporate social responsibility of extending moratorium of bank loans by another 6 months to aid their customers during the Covid-19 economic crisis. Even if the banks are unwilling to cough up the RM6.4 billion, the Federal government can bear the cost of RM6.4 billion to aid the 7.7 million individual borrowers and 245,000 SMEs.

The banks will be dealing mostly with low and middle-income groups. Many indeed do not have savings. In fact pre-Covid-19, BNM’s AKPK (Credit Counselling and Debt Management Agency) had reported that 36% of working Malaysian adults were unable to raise RM1,000 emergency fund, while 24% could survive up to three months with their own savings if retrenched. We can expect their financial situation to deteriorate in a more adverse manner with the Covid-19 economic crisis.

Further the RM6.4 billion cost is small compared to the tens of billions of ringgit in additional loans over and above the 2020 Budget loan provisions to finance the COVID-19 economic stimulus package. Failure to do so would only give rise to suspicion that the RM 295 billion economic stimulus package PRIHATIN to battle the COVID-19 economic crisis is only heard but not felt, benefiting certain well-connected groups but not ordinary Malaysians and SMEs.

There is also no increase in the RM2.1 billion Geran Khas Prihatin(GKP) where RM3,000 are given for 700k SMEs. At least 155,000 eligible Micro SME were unable to apply the GKP on time. The government should provide for another increase of RM1 billion in GKP.

Similarly there is also no extension of the Program Subsidi Upah to assist workers until end of March 2021. With the unemployment rate soaring to 5.3% or 830,000 unemployed workers such an extension is needed now to save jobs. Why wait to assist workers only after jobs are lost?

DAP urges Prime Minister Tan Sri Muhyiddin Yassin to stop spending money on political coups to bring down PH/Warisan state governments but focus on expanding financial aid to small businesses, workers’ salaries and extending loan moratorium by 6 months to save small businesses from bankruptcy and jobs losses.

DAP SECRETARY-GENERAL & MP FOR BAGAN
Media statement by Lim Guan Eng in Kuala Lumpur on Saturday, 1st August 2020