Image credit: New Straits Times
KUALA LUMPUR: THE three rounds of the Wage Subsidy Programme have been carefully tailored to meet industrial needs and demands, an economist noted yesterday.
Associate Professor Aimi Zulhazmi Abdul Rashid said the Perikatan Nasional government had enlarged the size of the Wage Subsidy Programme under each successive economic package to benefit a larger group of employees in an organisation.
"The first Wage Subsidy Programme under the Prihatin Rakyat Economic Stimulus Package (Prihatin) and the second round under the Prihatin Supplementary Initiative Package (Kita Prihatin) allowed a maximum of 200 workers per organisation to benefit from the assistance.
"However, this was increased to 500 workers per organisation under the Wage Subsidy Programme 3.0 that was implemented under the Perlindungan Ekonomi dan Rakyat Malaysia (Permai) package.
"Under the Strategic Programme to Empower the People and Economy (Pemerkasa), the tourism, wholesale and retail trade sectors will continue to receive the subsidies for another three months," he said.
Aimi said the initiative had been instrumental to support businesses, especially small- and medium-sized enterprises (SMEs), to stay afloat and weather the economic uncertainty.
The first three rounds of the Wage Subsidy Programme, he said, had successfully maintained the country's unemployment rate below five per cent between the first Movement Control Order (MCO) and MCO 2.0.
The programme's success story, he said, was reflected through the surging demand among businesses for the government to retain the initiative as the country geared up for a post-pandemic recovery.
"The subsidies assist companies to fill in the gap of meeting cash flow requirements, especially overheads like staff salaries.
"This is because the MCO has led to a decline in business volume, which resulted in shrinking revenue.
"Companies already burdened with small savings were forced to make tough calls to either reduce their workers' pay or terminate their service altogether.
"All economic sectors struggled with this dilemma, from tour and travel, the hotel industry, to event management as well as retail and manufacturing," he said.
Aimi said a longer subsidy provision or co-funding from the government would be vital as it might take months or even years before the world economy found its feet.
The government has so far disbursed RM14.4 billion under the Wage Subsidy Programme, which has benefited over 320,000 employees and saved up to 2.7 million jobs.
On March 17, Prime Minister Tan Sri Muhyiddin Yassin announced an additional allocation of RM700 million to provide targeted wage subsidy for the tourism, wholesale and retail trade sectors for another three months.
The initiative is expected to benefit some 37,000 employers and safeguard the rice bowls of 400,000 workers.
Source: https://www.nst.com.my/news/nation/2021/03/678332/retaining-jobs-and-keeping-businesses-afloat