PM Announced Short-Term Economic Recovery Plan

Prime Minister Muhyiddin Yassin just announced a short-term economic recovery plan worth RM35 billion.

The stimulus package is expected to help the economy recover from the impact of Covid-19 and the movement control order (MCO). RM10 billion of it will be in the form of direct fiscal injections.

Titled “Pelan Jana Semula Ekonomi Negara” or “Penjana”, the package was set with three main goals: 

• to empower the people, 

• propel businesses, and 

• stimulate the economy.

These goals are covered by 40 initiatives. The package focuses on supporting workers and small and medium-sized enterprises (SMEs) through training programmes, social support, financing schemes, boosting domestic consumption and supporting industries impacted by the outbreak and MCO.
 

Unemployment

The Prime Minister said the government would allocate some RM9 billion for three million workers through various initiatives including RM5 billion to expand the wage subsidy programme.

He said it would be extended a further three months past its original time frame of three months. This initiative will be set at RM600 per worker for up to 200 workers per company.

“For tourism sectors and others which have been closed during the MCO, companies can apply for the subsidies,” he said.

Muhyiddin also declared RM1.5 billion for hiring incentives which is expected to help some 300,000 through two incentives: 

• RM800 a month for each worker under the age of 40 hired and 

• RM1,000 a month for workers above the age of 40 or those who are special needs.

This incentive will be provided for six months.

To help the unemployed to increase their skills, those who have lost their jobs can claim training allowances of up to RM4,000 under Socso even if they do not contribute to the Employment Insurance System.

For the youth, incentives of RM600 a month will be handed out to companies that provide apprenticeships to fresh graduates.

The government will also allocate RM2 billion for upskilling programmes for the youth and unemployed which will benefit over 200,000 people. For the youth, this includes placement and training at selected institutions as well as subsidies for training.

For those who are unemployed, the government will manage upskilling programmes for critical industries such as electrics and electronics, IT and communications. It will also provide short-term learning incentives.

Gig economy and SMEs

The Prime Minister said the government would also allocate RM50 million in matching grants for companies in the gig economy to make Socso and EPF contributions for their workers.

“In line with the government’s call to encourage SMEs to implement work-from-home practices, insurance coverage and tax incentives will be provided,” he added.

“For example, tax exemptions of up to RM5,000 for workers who get a tablet, computer or smartphone from their employers.”

Businesses

Muhyiddin said the government noted that businesses had been coping with cash flow issues and reduced demand. He promised that they would help all businesses no matter the size through multiple initiatives.

One of these is an initiative called Shop Malaysia Online which will promote online shopping through the provision of promotion codes, among others. RM70 million will also be allocated for matching grants, and a further RM700 million to help SMEs digitalise their operations.

RM1 billion will be allocated to help SMEs in the tourism sector, while RM400 million will be allocated for the support of microbusinesses. Another RM500 million will be allocated for loans for Bumiputera entrepreneurs.

The government will credit RM50 into e-wallets to encourage cashless payments.

The Prime Minister also said tax incentives would be extended for companies purchasing equipment such as thermometers and PPE.

For SMEs, the government will also provide income tax rebates of up to RM20,000 for three years set up between July 1 and Dec 31 this year. To encourage competitiveness, it will also give out stamp duties on mergers and acquisitions to form new SMEs.

The government will also allocate RM100 million for an initiative called the “National Technology and Innovation Sandbox” to discover new technology and innovations.

To encourage cashless payments, the government will credit RM50 into e-wallets which will be matched by RM50 in vouchers and cashback.

Source: FreeMalaysiaToday

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