Malaysia's interim Prime Minister Mahathir Mohamad yesterday momentarily stepped away from the political crisis enveloping the country to announce a RM20 billion (S$6.6 billion) financial stimulus package targeted at tackling the impact of the coronavirus outbreak.
With the Cabinet dissolved when the 94-year-old resigned as premier on Monday, he was appointed as interim PM. Tun Dr Mahathir announced the measures at a press conference flanked by civil servants instead of ministers.
And despite the Pakatan Harapan government having collapsed this week, he said the stimulus package - which is not part of Budget 2020 - can still be disbursed through "bureaucratic procedures".
Asked how the package would be funded in times of tight budgets, he said: "Malaysia has almost two trillion dollars of savings. We will make use of some of these savings."
He said this would include utilising monies from the central bank, pilgrims' fund Tabung Haji as well as retirement fund Employees Provident Fund (EPF).
Yesterday's announcement had been scheduled prior to the political chaos, though there had been expectations that the event would be cancelled.
Reading from a prepared statement at the press conference, Dr Mahathir said that though the outbreak has been well contained in Malaysia, it has had a significant impact on the global economy and Malaysia - with the sharp decline in tourist arrivals throughout the region.
As of yesterday, Malaysia had recorded 23 confirmed cases of the coronavirus infection.
"The government is introducing the Economic Stimulus Package 2020 to ensure the risks related to the outbreak can be tackled effectively," he said.
"To mitigate the impact, the government will implement a three-pronged approach - first, to ease the cash flow of affected businesses; second, to assist affected individuals; and third, to stimulate demand for travel and tourism," he added.
Among the measures he announced, hotels, travel agencies, airlines, shopping malls, convention and exhibition centres will get a 15 per cent discount on monthly electricity bills for six months beginning April.
RM20 billion: Total size of stimulus package
RM400: Monthly allowance for front-line medical staff
RM600: How much each taxi driver, tourist bus driver, tour guide, trishaw rider will get
RM100: Vouchers for each Malaysian to spend on domestic travel
Hotels will also be exempted from the 6 per cent service tax from March to August.
Government staff on the front lines of the outbreak, such as doctors and medical personnel involved in containment efforts, will be eligible for a special monthly critical allowance of RM400 while immigration and related front-line workers will receive RM200 from February until the end of the outbreak.
To help individuals affected, taxi drivers, tourist bus drivers, tour guides and registered trishaw riders will be given RM600 each.
Given the sudden decline in tourism, especially tourist arrivals from China, the stimulus also looks at pushing domestic tourism by giving Malaysians RM100 vouchers for flights, rail travel and hotel stays. This is on top of a RM1,000 tax relief for expenses made on domestic tourism.
Workers' contribution to the Employees Provident Fund will be lowered from 11 per cent to 7 per cent to increase take-home pay. The move, which will stretch from April to December this year, is expected to free up RM10 billion for private consumption.
Funds will also be diverted to buying supplies.
"To date, the Ministry of Health has committed RM150 million to purchase the relevant equipment, medicine and consumables in the effort to contain the Covid-19 outbreak," Dr Mahathir said, adding that the government will continue to provide the necessary resources to ensure the disease is well-managed.
Citing a previous economic stimulus package the country had rolled out during the severe acute respiratory syndrome (Sars) outbreak in 2003, he said the package then had led to an economic recovery, adding that he hoped the 2020 package would produce the same results.
The additional spending will see the government's fiscal deficit rise to 3.4 per cent of GDP as opposed to the original target of 3.2 per cent of GDP.
With the coronavirus outbreak severely impacting China, Malaysia's largest trade partner, the central bank expects this year's first-quarter GDP growth to be severely affected.
Yesterday, Malaysia revised its 2020 economic growth forecast due to the outbreak and a continued global economic downturn, lowering GDP to a range of 3.2 per cent to 4.2 per cent.
Its original GDP forecast for 2020 was 4.8 per cent.