The additional RM45 billion fiscal injection into the economy agreed to by the government in the MOU between the Prime Minister and PH must not be hijacked for political purposes to fulfil their pet projects, but must be given out in the form of direct grants to SMEs, tourism and construction industry that lost a total of RM213 billion due to the COVID-19 pandemic. The necessary legislation has been permitted to be passed in Parliament recently to increase the COVID-19 Development Fund by RM45 billion as well as raise the government’s statutory debt limit from 60% to 65%.
The country recorded more than RM500 billion in economic losses since the first total lockdowns were imposed last year. According to the Department of Statistics, the worst hit is the tourism sector with RM130 billion losses in 2020 and even higher losses are expected this year. Works Minister Fadillah Yusof had told Parliament that the construction sector lost RM42 billion during lockdowns imposed since last year.
Then Entrepreneur Development and Cooperatives Minister Wan Junaidi Tuanku Jaafar said on 29.7.2021 that SMEs have suffered a total loss of RM40.7 billion in 2020. DAP had suggested that the 3 months interest rate waiver for the poorest 50% of the population should also include SMEs, who are in dire financial straits, following the failed management of the twin national crisis of COVID-19 pandemic and the ensuing economic recession.
Even if the government is not considering interest rate waivers, they should consider a reduction of interest rate by at least 2% for the beleaguered SMEs, construction and tourism industry. In the meantime, there is an urgency to release these RM45 billion in funds to the SMEs, tourism and construction industry as soon as possible to allay concerns that these funds may be utilised for political purposes, particularly with the upcoming Melaka state general elections.