At the second 2022 Budget Consultation series with Finance Minister Tengku Zafrul Abdul Aziz with PH leaders yesterday, there was in-depth discussion about the direct fiscal injection of RM45 billion into the economy to save businesses, especially SMEs, and incomes adversely affected by both the COVID-19 pandemic and the deepening economic recession. The RM45 billion additional direct funding is one of the key clauses of the Memorandum of Understanding(MOU) for Transformation and Stability between the Prime Minister and four top Pakatan Harapan Leaders in Parliament House on 13 September 2021.
The success or failure of this historic MOU will depend on whether it can be fully implemented as promised according to the timelines set. PH is determined that the rakyat will directly benefit from the implementation of the MOU particularly a National COVID-19 Reset Plan to win the battle against COVID-19, and the RM45 billion Economic Turnaround Plan accompanied by a waiver of interest payments for three months during the bank loan moratorium for the poorest 50% of the Malaysian population. The recent announcements by Finance Minister Tengku Zafrul Abdul Aziz implementing these measures are the first fruits of success for the people benefiting from this MOU.
The Finance Ministry’s proposals to raise both the Covid-19 Fund by RM45 billion from RM65 billion to RM110 billion, and increase the statutory national debt limit from 60 % to 65% of the GDP will help to support the people and businesses, particularly SMEs, during the reopening of the economy. PH is willing to lend support to such necessary legislation contingent on assurances that the direct grants will be given out speedily to the targeted goods needing such assistance.
PH leaders will need to explain to the people that these benefits are a key part of the MOU from PH to save lives and livelihood, which were previously rejected by the government but now accepted as part of government policy. The country recorded more than RM500 billion in economic losses since the first total lockdowns were imposed last year. The worst hit is the tourism sector with RM130 billion losses in 2020 and even higher losses are expected this year. The government should consider interest rate waivers or a reduction of interest rate by at least 2% for this beleaguered industry.
In a written reply to a parliamentary question recently, Prime Minister Datuk Seri Ismail Sabri Yaakob said as much as 20% or about 580,000 households from the M40 group have shifted to the income limit below the B40 group. The middle 40 % (M40) group received a monthly income of between RM4,850 and RM10,959.
The absolute poverty figure in Malaysia rose to 8.4 % in 2020. This is a big increase from 5.6% based on the Department of Statistics Malaysia (DOSM), which is still applied to the current Poverty Line Income (PLI) set at RM2,208 per month. This drastic drop in incomes have motivated PH to set aside political differences and the quest to restore the electoral mandate stolen from the people given in the 2018 general elections to focus on saving the country and the people’s lives and livelihood.