Former finance minister Lim Guan Eng has warned the Perikatan Nasional government that the forthcoming eighth economic stimulus package to be unveiled in the coming days must not be cosmetic in nature.
Instead, he called for it to comprise an automatic bank loan moratorium with interest waivers until the end of the year, and a minimum RM45 billion fund injection to offset the expected economic losses of RM170 billion incurred from the current movement control order(MCO) total lockdown.
"The PN government has finally bowed to pressure from the public and opposition MPs, following Finance Minister Tengku Zafrul Abdul Aziz’s announcement of a bank loan moratorium and Employee Provident Fund (EPF) withdrawals via the i-Sinar facility.
"However, it has refused to admit the current MCO total lockdown will cost the economy RM170 billion beyond saying that the country will lose RM1 billion daily.
"Even this low estimate of RM1 billion daily economic loss will soon exceed RM45 billion with the expected extension of the current total lockdown after June 28," Lim said in a statement today.
He claimed that one of the principal reasons the previous seven economic stimulus packages totalling RM380 billion, introduced since last year by PN to offset the ensuing economic recession from the Covid-19 pandemic, failed to make any impact is due to the inadequate sum of direct funding.
"Of the RM380 billion, direct fiscal injections are estimated at a mere RM77.6 billion which is grossly inadequate to deal with the hundreds of billions of ringgit in economic losses since the first MCO 1.0 total lockdown," added the Bagan MP.
"Pakatan Harapan had proposed an automatic loan moratorium until the end of the year, except for the Top 20, and an injection of RM45 billion in financial aid as soon as possible to save jobs, economic livelihood, and businesses.
"Out of this RM45 billion, at least RM35 billion must be reserved to help struggling businesses, particularly the nearly one million SMEs that make up 98.5 percent of business establishments in Malaysia and contribute 39 percent to our country’s GDP in 2019," he added.
Prime Minister Muhyiddin Yassin has just confirmed that the movement control order (MCO) will not end tomorrow, and will continue until the threshold of less than 4,000 cases a day is reached.
"The governmant will announce more comprehensive assistance to all groups of society on Monday or Tuesday," said the Pagoh MP.
The Health Ministry yesterday reported 5,803 new Covid-19 cases, and there were 81 fatalities bringing the cumulative death toll to 4,884.
Meanwhile, Lim pointed out that the World Bank reported that the average Malaysian firm is less equipped to face a crisis like Covid-19 compared to their regional peers, with less cash in hand of 4.9 months cash flow available, which is lower than Indonesia (9.5 months) and Vietnam (5.9 months).
"The World Bank added that 60 percent of firms are either in arrears or at risk of falling into arrears within the next six months.
"That is why an automatic bank loan moratorium accompanied by interest waivers until the end of the year is so necessary.
"The banking industry can definitely afford such a moratorium with interest waiver after recording healthy after-tax profits of RM32.3 billion in 2019, RM23 billion in 2020 and also during the first quarter of this year," he said.
He also cited a survey by the Ministry of Entrepreneur Development and Cooperatives on June 4 which said more than 90 percent of micro, small and medium enterprises (MSMEs) risked closure, with 54 percent saying they could only survive three to six months and 72 percent expecting to suffer losses.
"The SME Association of Malaysia disclosed that 100,000 SMEs closed last year and 50,000 more are expected to suffer the same fate from the current total lockdown.
"The PN government must urgently provide financial help of RM35 billion in the form of rental, wage and utility subsidies; and hiring and wage incentives to create new jobs as well as grants.
"Increasing monthly welfare payments to RM1,000 for the B40 and the unemployed will cost RM6 billion until the end of the year, a social safety net protecting unemployed and workers with cash flow problems.
"An extra RM4 billion funding (is needed) to help hire more doctors and nurses as well as reinforcing the health support system to fight Covid-19 and ramp up vaccination," he added.