Coronavirus: Malaysia pumps in $3.3b more stimulus after grumbles from firms

An empty street with closed shops in Kuala Lumpur, on April 2, 2020.
An empty street with closed shops in Kuala Lumpur, on April 2, 2020.PHOTO: EPA-EFE

Malaysia has approved RM10 billion (S$3.3 billion) to help companies suffering amid the coronavirus outbreak, with most of the sum going towards more than doubling a wage subsidy to RM13.8 billion, from the RM5.9 billion announced last month.

This comes after widespread complaints, especially from small and medium-sized enterprises (SMEs), over insufficient support in the RM250 billion stimulus package unveiled on March 27 by the government, out of which only a tenth was actual fiscal spending, with the rest coming in the form of release of retirement savings and extension of credit.

Prime Minister Muhyiddin Yassin announced the new measures yesterday, saying it would benefit up to 4.8 million employees, as their employers must maintain them on the books for at least six months to qualify for the subsidy.

"This sector (SME) contributes over two-thirds of jobs in the country and nearly 40 per cent of the economy. Therefore it is critical we ensure SMEs are stable and able to face the pressure and economic challenges that have hit all of us at this time," he said in a televised address.

The previous subsidy of RM600 monthly for three months for employees with a monthly salary of up to RM4,000 will be increased, depending on the number of workers a company employs. Those employing 75 or fewer people can obtain up to RM1,200 monthly in wage support for three months per worker earning under RM4,000.

Those with 76 to 200 workers can claim RM800, while the subsidy for larger firms will be maintained at RM600, although the sum can be claimed for 200 workers, instead of only 100 previously.

Some 700,000 micro enterprises will also receive a one-off grant of RM3,000 each, totalling RM2.1 billion.

The government's micro-credit scheme was also expanded to a total of RM700 million with zero interest, from the previous 2 per cent.

Landlords who give their commercial tenants at least 30 per cent in discounted rental from this month to June will be able to deduct the amount in their tax claims.

The SME Association had warned that up to 70 per cent of its members would run out of cash by the end of this month, and that a quarter of Malaysia's 16 million-strong labour force could be out on the streets if the impact of the virus outbreak was not cushioned.

The 28-day movement control order put in place on March 18 entered its 20th day yesterday.

With new infections still persisting at over 100 daily, it is likely the movement curbs will be extended to at least the end of the month.

Malaysia yesterday reported 131 new coronavirus cases, to bring the cumulative total to 3,793. Total fatalities stood at 62, with one new death reported.

Meanwhile, Thailand confirmed 2,220 cases and 26 fatalities yesterday.

The Philippines reported 11 additional deaths, for a total of 163, and 414 new infections to bring the cumulative total to 3,660.

Myanmar has reported just 21 cases of Covid-19, including one death so far, but experts say the low number of people tested for the virus means the real figure is likely to be many times higher.

There have been 245 reported cases of the coronavirus in Vietnam and no reported deaths, according to the country's health ministry.

A version of this article appeared in the print edition of The Straits Times on April 07, 2020, with the headline 'Malaysia pumps in $3.3b more stimulus after grumbles from firms'. Subscribe