Economic stimulus package may only sustain ‘Makcik Kiah’ for two months, says Pakatan presidential council

Soo Wern Jun
Shoppers throng Chow Kit’s wet market in Kuala Lumpur March 17, 2020. — Picture by Firdaus Latif

KUALA LUMPUR, March 27 — The Pakatan Harapan (PH) presidential council today claimed that while the RM250 billion economic stimulus package announced by Prime Minister Tan Sri Muhyiddin is good for “Makcik Kiah”, it may not last beyond two months.

In a joint statement, PKR president Datuk Seri Anwar Ibrahim, Parti Amanah Negara president Mohamad Sabu and DAP secretary-general Lim Guan Eng said that the economic package is decent, but would not have much impact beyond two months.

“It is welcoming in that sense. For a two-month period, the package is decent.

“But it won’t have much impact beyond a two-month period for ‘Makcik Kiah’ and the rest of Malaysia’s workers and businesses,” PH said.

Makcik Kiah is a character Muhyiddin had earlier used as an example in his announcement to depict an ordinary Malaysian and how much they could benefit from the stimulus package.

The Opposition coalition also said that more must be done to assist small and medium enterprises (SMEs) which are bearing the economic brunt of the movement control order (MCO).

“Therefore, the RM600 per worker wage subsidy is insufficient to mitigate the impact of the crisis.

“We would like to propose that the wage subsidy be increased to RM1,200 per worker,” PH said.

The PH presidential council also acknowledged that while the stimulus package is touted as RM250 billion, upon careful scrutiny, the actual direct government expenditure is only RM25 billion which will be financed via additional government borrowings.

“This is only a rough calculation, as some of the details are unclear from the prime minister’s speech.

“This means that around RM205 billion out of the RM250 billion announced is in fact merely deferments or loan guarantees,” the statement read.

The statement also pointed out that there is an assumption that businesses would still be interested in borrowing during this time.

“But that is only going to happen if the nation emerges from the MCO at some point and the businesses are still surviving while there is still economic demand for goods and services,” read the statement.

Analysing the stimulus package further, the PH presidential council also observed that the government intends to finance the fiscal injection by cutting spending in ministries that the council says could trigger another round of austerity measures that the economy could do without right now.

“The government, according to the prime minister, doesn’t intend to borrow further to finance its fiscal injection ‘in the interest of the long-term,’ perhaps for ‘rainy days’.

“But this is no longer just a downpour, this crisis is the worst storm that we have seen in our memory.

“We hope the government would consider a much larger fiscal injection in the next few weeks; otherwise, the economy would still be in dire straits with more job losses,” the statement read.

Earlier today, Muhyiddin announced a RM250 billion economic stimulus package to address economic fallout caused by the Covid-19 outbreak.

In February, former prime minister Tun Dr Mahathir Mohamad had also announced a RM20 billion economic stimulus package to help industries affected by Covid-19.

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