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Manufacturers laud PENJANA’s inclusion of all economic sectors

Manufacturers laud PENJANA’s inclusion of all economic sectors

06 Jun 2020

The Federation of Malaysian Manufacturers (FMM) has commended the government’s PENJANA Economic Recovery Plan, saying it is a comprehensive package that encompasses all segments of the economy and focuses on securing jobs.

It also assists with business transformation in adopting to the new normal via innovation and digitalisation, FMM president Tan Sri Soh Thian Lai said, in addition to empowering micro and small and medium enterprises, as well as building resilience to stimulate the economy.

“In particular, FMM welcomes the initiatives to continue securing jobs and in tackling unemployment through the several initiatives, such as the hiring incentives for employment of youth and the unemployed, [and] expansion and extension of the Wage Subsidy Programme (WSP),” Soh said.

Other initiatives for the reskilling and upskilling of workers, as well as the allocation for training allowance for the unemployed and tax incentives given to boost the work-from-home culture, further supports Malaysia’s transition to the ‘new normal’, he said.

“FMM also welcomes the tax rebate introduced for new SMEs. We propose that the incentive be extended to existing SMEs that are long established and already in operations for new and/or upgrading projects started prior to the Movement Control Order (MCO),” he said.

FMM also proposed that the 0% tax rate and the investment tax allowance introduced, be backdated to proposed investment projects approved since 2019, which had yet to commence due to Covid-19.

“These are already ‘captive’ and should be retained, as much effort had been carried out to bring in and secure these investments. In addition, these investments can have strong potential of multiplier effect benefitting (the) SMEs through the Industrial Linkage Programme (ILP) and the Buy-Malaysia campaign and further strengthening (the) SMEs role in global supply chain. It is also proposed that these incentives be also extended to new domestic investments,” Soh added.

He also called on the government to continue with the initiatives to pump prime the economy by expediting infrastructure and development projects, including increasing consumption of Made-in-Malaysia products and services for all public and private projects.

SMEs Association of Malaysia president Datuk Michael Kang Hua Keong similarly commends the government for the comprehensive economic recovery packages, particularly with regards to safeguarding employment and supporting the SMEs in adopting digitalisation.

The initiatives for SMEs include RM1 billion allocation to tourism-related firms for transformational initiatives to operate in the new normal amidst Covid-19, and grants and loans worth RM700 million to allow more companies to adopt digitalisation, including the RM100 million digital grants placed under telcos, RM500 million via the SME technology transformation fund, and a smart automation grant worth RM1 million for each eligible company.

However, Kang said the allocation for grants and loans to SMEs was lesser than expected, as the association was expecting about RM50 billion to help up to 200,000 SMEs in the country, who are facing dire cash-flow issues.

“Now, I am hoping the government can provide more grants for these SMEs, that will allow them to have sufficient cash flow to run their businesses and continue to pay their employees,” said Kang when contacted.

Source: The Edge Markets

Posted on : 06 June 2020