Malaysia’s Covid-19 stimulus packages on par with those in developed countries, says Finance Ministry report

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Prime Minister Tan Sri Muhyiddin Yassin delivers a keynote address at the Putrajaya International Convention Centre March 1, 2020. — Bernama pic
Prime Minister Tan Sri Muhyiddin Yassin delivers a keynote address at the Putrajaya International Convention Centre March 1, 2020. — Bernama pic

KUALA LUMPUR, July 18 — Malaysia’s Covid-19 stimulus packages contributed 20 per cent to the country’s gross domestic product (GDP), comparable to other developed countries and higher than regional developing countries, a comparative analysis of government assistance reported.

The Ministry of Finance analysis compared Malaysia against Asia Pacific (Indonesia, Philippines, Singapore, Thailand, Vietnam, Australia, New Zealand, China, Taiwan, South Korea) and the United Kingdom and United States of America.

“In the US, stimulus packages contributed 26.5 per cent to GDP, New Zealand 19.3 per cent, Australia 19.1 per cent and the UK 17.8 per cent.

“As for the Asian region, Malaysia is on par with Singapore at 20 per cent as well, while other countries such as China, Thailand, Vietnam and Taiwan contributed below 10 per cent to their GDP,” the report found.

The analysis was done by the Unit for the Implementation and Coordination of National Agencies on the Economic Stimulus Package (Laksana).

Laksana found the initiatives which Malaysia has put in place are currently not available in other countries. This includes insurance moratorium (for three months), real property gains tax exemption and My30 and My5 unlimited passes.

“Other initiatives which Malaysia could consider under the Rakyat stimulus package are rent relief grants to prevent evictions, Covid-19 leave and self-isolation support for workers, payout for family or dependents of deceased due to Covid-19,” the report said.

Under the business stimulus package, Laksana found that the Malaysian government’s efforts in supporting businesses cover several different key areas and the initiatives offered are almost similar to those in other countries.

“The initiatives include loan moratorium (automatic basis for six months), targeted repayment assistance (opt-in basis for 100 per cent for three months or 50 per cent for six months).

“Tekun Micro financing (up to RM100,000), Penjana Tourism Fund (up to RM300,000), Prihatin special SME Grant (one-off, RM 3,000), DanaJamin (up to 10 years term, RM5 million to RM 1 billion) and Dana Penjana,” the report said.

According to Laksana, other initiatives which the Malaysian government could consider in the future are the UK’s Covid-19 Restart Grant, reducing corporate tax for big and small businesses, amendments to insolvency laws, increasing the threshold and duration of time to respond before creditors take action.

Under the economy stimulus package, overall, the Malaysian government’s assistance covered key sectors such as tourism, food, healthcare and other sectors such as small scale projects (contracts for G1 to G4 contractors) and Sukuk Prihatin (minimum RM500).

“Initiatives which Malaysia has put in place which are currently not available in other countries would be the Sukuk Prihatin.

“Other initiatives which Malaysia could consider including a 50 per cent subsidy on Covid-19 tests for tourists to boost tourism, restaurant revitalisation fund for their food and beverage sector players, reimbursement of accommodation providers for their lost bookings due to Covid-19 for the entire lockdown period, Green New Deal to support net eco society by supporting greenhouse gas emissions reduction and 20 per cent energy sourced from renewables,” the report said.

The Perikatan Nasional (PN) government had pledged RM380 billion in relief packages since the first movement control order (MCO) was imposed on March 18 last year.

A year later, Prime Minister Tan Sri Muhyiddin Yassin launched the Strategic Programme to Empower the People and Economy or Pemerkasa worth RM20 billion.

Muhyiddin said Pemerkasa would focus on 20 strategic initiatives to boost economic growth, support business, and to continue targeting assistance to all who are affected.

Most recently, the prime minister had in June announced RM150 billion in Covid-19 relief spending with RM10 billion in aid to be channelled towards low- and middle-income households affected by the public health crisis.

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