Image credit: The Malaysian Reserve
PETALING JAYA: Businesses have generally lamented that Budget 2021 lacks strong focus in helping SMEs get back on their feet. But some industry observers say the budget should not just be viewed on its own, as measures to assist SMEs have been ongoing from the previous stimulus packages.
“There is no specific area on SMEs in the budget. The measures are scattered here and there. So, people say there is nothing for businesses, but there are.
“If you look at the budget alone, the measures for SMEs may not be enough. But the budget needs to also take into account other things like the rakyat’s needs and the fight against Covid-19. So, we saw a big allocation for those needs.
“But we should also look at all the stimulus packages that have been announced since February because this budget is a continuation of those efforts and measures, ” said Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) SMEs committee chairman Koong Lin Loong (pic)
Under the Prihatin SME Plus, Penjana and Kita Prihatin stimulus packages, initiatives such as the wage subsidy programme, soft loans, micro financing and hiring incentives were introduced. Budget 2021 saw an extension of a more targeted wage subsidy programme for the tourism sector, targeted loan repayment assistance for micro enterprises, additional funds for micro SME and an additional RM150mil for the SME Digitalization Grant Scheme and the Automation Grant, among other things.
Koong added that the measures to make Malaysia a destination for high-value service activities will attract foreign investment and spur the local economy, which will benefit SMEs.
Among the measures include the relaxation of tax incentive conditions for the Principal Hub and an extension of the incentive till end 2022 as well as new tax incentive for the establishment of the Global Trading Centre at a concessionary rate of 10% for a period of five years and renewable for a period of another five years.
He also lauded the government’s move to continue several mega projects as these will have spillover effects for small businesses.
However, Koong said one of the things he had hoped to see in the budget was more funds allocated for low-interest soft loans for SMEs.
“SMEs need more direct support in these times. Given the increased measures of the conditional movement control order (MCO), the impact could be more severe this time compared to the first round of MCO because SMEs don’t have the reserves now. So their cash flow will be affected.
“So they need more direct assistance, especially in terms of financing. Also, businesses can’t wait long for the funds. Quite a lot of SMEs who applied for the wage subsidy haven’t gotten the funds yet, ” he said.
The effects of the Covid-19 pandemic will continue to be felt next year, particularly if a vaccine is unavailable anytime soon.
Given as such, the budget may not be enough to sufficiently stimulate the economy next year for businesses to recover their sales to pre-Covid levels. Additionally, there will be limitations on the government’s revenue.
“Because of the pandemic, we couldn’t achieve the objectives for year 2020. I think the government should do a study on what went wrong so that they can have measures that close the gaps rather than just have an expansionary budget that tries to touch on everything, ” he said.
Source: https://www.thestar.com.my/business/business-news/2020/11/09/budget-a-continuation-of-efforts-to-help-smes