The government said the economic impact of the second Movement Control Order (MCO 2.0) imposed on many parts of the country will be less severe compared to the first such coronavirus measures introduced last year.
Prime Minister (PM) Tan Sri Muhyiddin Yassin said the government has allowed more economic activities to continue since the MCO was reimposed last week to support stronger recovery in trade and economy.
“The impact of the current MCO on the economy is expected to be manageable. Growth will continue to be supported by a strong exports sector and the global trade recovery,” Muhyiddin said yesterday.
The PM unveiled the government’s assistance programme to help people cope with the new restrictions, called Malaysian Economic and Rakyat’s Protection Assistance Package, or Permai.
Malaysia’s GDP numbers plummeted in the second quarter of 2020 (2Q20) as a direct impact of the first, more restrictive MCO that was introduced in March 2020.
Muhyiddin said the implementation of various economic stimulus packages helped the country achieve a smaller GDP contraction rate from 17.1% in 2Q20 to 2.7% in 3Q20, and a reduction in the unemployment rate from 5.1% to 4.7% for the same period.
The PM announced Permai valued at RM15 billion in order to improve the existing ongoing initiatives and accelerate the implementation of related initiatives.
Muhyiddin said Permai has 22 initiatives anchored by three main objectives, which are combating the Covid-19 outbreak; safeguarding the welfare of the people; and supporting business continuity.
Under the first goal of combating the Covid-19 pandemic, he said the government has allocated an additional RM1 billion comprising RM800 million to the Health Ministry, and the remainder to the National Security Council and other relevant agencies.
The allocation focuses on supplies, including additional reagents, screening kits and personal protective equipment.
He said the Covid-19 vaccination programme is on track and will be implemented in phases over 12 months.
“This means the first batch is expected to be vaccinated by early March, and Malaysia is expected to meet its target of vaccinating more than 80% of its population or close to 27 million people by 1Q22,” he added.
He also said the Special Muzakarah Committee of the National Council for Malaysian Islamic Affairs has decreed that the Covid-19 vaccine is allowed and is a necessity for specific groups.
Muhyiddin said the government will recruit an additional 3,500 healthcare personnel, who will start working at the end of this month, with an additional allocation of RM150 million.
These recruits comprise assistant medical officers, paramedics, laboratory technicians and nurses.
To further enhance cooperation between the public and private sectors, he said private hospitals have agreed to receive and treat both Covid-19 and non-Covid-19 patients to help alleviate the strain on the public healthcare system, with the government allocating RM100 million.
Under the second objective to safeguard the people’s welfare, he said the moratorium facility, including the extension of the moratorium and restructuring of loan repayment, will continue to be offered by banks as announced previously, while for flood-affected states, 15 banks have offered the loan repayment moratorium.
To date, he said more than 1.3 million borrowers have applied for and received such assistance, with an approval rate of 95% for individual borrowers and 99% for small and medium enterprise (SME) borrowers.
Muhyiddin also announced that a special tax relief of up to RM2,500 on the purchase of mobile phones, computers and tablets which expired on Dec 31, 2020, will be extended for another year until the end of 2021.
For the National Higher Education Fund Corp (PTPTN) borrowers affected by the Covid-19 pandemic or floods, he said they can apply for a three-month PTPTN loan repayment moratorium.
Application for the PTPTN moratorium can be made until March 31, 2021.
Under the third objective of supporting business continuity, Muhyiddin announced that the Wage Subsidy Programme 3.0 under the Social Security Organisation (Socso) will be enhanced, whereby all employers operating in the MCO states will be eligible to apply, irrespective of sectors.
He said, for one month, eligible employers will receive a wage subsidy of RM600 for each employee earning less than RM4,000.
Also, the wage subsidy limit of 200 employees for each employer will be increased to 500 employees.
Muhyiddin said the initiative involves an additional allocation of RM1 billion which is estimated to benefit 250,000 workers employing more than 2.6 million workers.
He also said RM24 million has been allocated to fund the full contribution under Socso’s Self-Employment Social Security Scheme in appreciation to delivery riders during the MCO.
He said almost 32,000 applications from delivery riders have been received under the scheme to date.
He further said the government has agreed to provide a one-off financial assistance of RM500 to 14,000 tourist guides, as well as 118,000 drivers of taxis, school buses, tour buses, rental cars and e-hailing vehicles, with an additional allocation of RM66 million.
The government also enhanced the RM50 billion Danajamin Guarantee Scheme under the Shortterm National Economic Recovery Plan, or also known as Penjana.
Muhyiddin said the government will increase the maximum financing from RM500 million to RM1 billion; expand the scope of financing to cover working capital with a guarantee period of up to 10 years; and allow foreign-owned companies operating in Malaysia to also obtain the Danajamin Guarantee provided that Malaysian employees account for at least 75% of their workforce.
He added that the government has given a special tax deduction to any company that provides a reduction of rental on business premises to SMEs of at least 30% from the original rental rate from April 1, 2020, to March 31, 2021.
Based on current economic conditions, he said the special deduction will be expanded to cover the rental reduction also given to non-SMEs, and its period will also be extended until June 30, 2021.
Source: https://themalaysianreserve.com/2021/01/19/govt-rolls-out-rm15b-package/