DAP expresses surprise that Prime Minister Tan Sri Muhyiddin Yassin announced the extension of the “recovery movement control order” (RMCO) until the end of the year without any additional economic package. Extending RMCO without extending the moratorium on bank loans by 6 months and an additional injection of RM45 billion to the COVID-19 Economic Fund will adversely affect efforts to save Malaysian jobs, SMEs and now manufacturers
The Prime Minister should realise the extension of the RMCO will have negative economic consequences that must be alleviated with financial assistance. Assurances that the COVID-19 pandemic was under control will be more heartening to workers and small businesses, if financial measures are also announced to quickly lift our economy out of our current recession.
Over 41% of Malaysian manufacturers had said their businesses would only be sustainable for less than a year, as a result of revenue loss following the COVID-19 lockdown. Unemployment rate of 4.9% in June is still high and also hides the fact that many are underemployed, where professionals such as pilots are doing jobs other than flying airplanes.
Worse are pay cuts. The Department of Statistics Malaysia in April, reported 84% of private employees had suffered pay cuts whilst Bank Negara Malaysia also reported that during the second quarter, private wages fell by 5.6% from a year ago.
The situation would be much worse without the government stimulus packages, wage subsidies and bank moratoriums. Clearly an additional RM45 billion is needed to the existing RM45 billion fund injection(total RM90 billion) to save not only Malaysian jobs, SMEs but also manufacturers.
An extension of the moratorium of bank loans by another 6 months is also necessary. 8 million individual Malaysians and companies have benefited from the value of loan moratorium at RM74.3 billion. Extending the loan moratorium by another 6 months when it expires on 30 September 2020, will only cost banks another RM6.4 billion.
The banking industry can afford RM6.4 billion when it recorded profits after tax of RM32 billion last year. Even if the banking industry refuses to bear the cost, the government should come out with the RM6.4 billion. What is RM6.4 billion compared to the RM295 billion economic stimulus package and when it can help 8 million individuals and small businesses?
With Malaysia recording our worst economic growth performance in ASEAN of a 17.1% contraction in the 2nd quarter, urgent economic measures must be taken to pull Malaysia out of the recession quickly. Why wait until next year when the government can help now? Saving jobs and businesses must be the priority now, not wait until next year.