DAP has urged the government to implement a slew of measures to help small and medium enterprises (SME) stay afloat following warnings that nearly half of SMEs risk failing by October if they are not allowed to operate.
In July, the Entrepreneur Development and Cooperatives Ministry (Medac) had warned that 49 percent or 580,000 SMEs are at risk of failing if they cannot resume business by next month.
The Medac minister at the time, Wan Junaidi Tuanku Jaafar, said this will lead to the retrenchment of about seven million workers.
A solution, said Lim, was for the government to loosen fiscal constraints and help businesses regularly.
“The government must shift from the old economic orthodoxy of financial band-aids with occasional ‘one-off’ assistance, to regular, periodic and recurrent payments to pull the country out of this once in a lifetime economic recession,” he said.
Lim also repeated DAP's suggestion of a three-month waiver of interest during the bank loan moratorium period and an additional RM45 billion direct fiscal injection.
Meanwhile, Lim said Finance Minister Tengku Zafrul Abdul Aziz has “finally accepted reality” by proposing to raise the statutory debt limit to 65 percent, up from 60 percent currently, of GDP.
“The new government has no choice but to do so, following the disastrous failure of the previous prime minister Muhyiddin Yassin to overcome both the Covid-19 pandemic and economic crisis that has destroyed countless lives and livelihoods,” said Lim.
In November last year, Zafrul said a 60 percent debt ceiling was “still sufficient”. However, as the Covid-19 pandemic got worse this year, Zafrul said he will propose raising the debt ceiling to 65 percent.
During the Najib Abdul Razak administration, the debt ceiling was set at 55 percent. It was “temporarily” raised last year by the Muhyiddin administration.