The RM250 bil package
| For the people | RM128 bil |
| For businesses | RM100 bil |
| Strengthening the economy | RM2 bil |
| Earlier stimulus package | RM20 bil |
| Total | RM250 bil |
A STIMULUS package worth RM250 bil was announced by Prime Minister Tan Sri Muhyiddin Yassin on March 27.
The package, titled “Prihatin”, will see RM128 bil channelled towards citizen welfare, RM100 bil for businesses including SMEs, and RM2 bil to strengthen the economy. RM20 bil was already announced previously.
Immediate aid will be channelled to relieve the burden of the people. RM1 bil will go towards more equipment and skills for the Ministry of Health and to support it to perform more tests. A special fund worth RM8 mil will be set up by insurance companies and Takaful. Insurance and takaful contributors will see their premiums suspended for three months due to the Covid-19 outbreak for those with incomes affected by the pandemic.
Special allowances to medical staff will be raised to RM600 from RM400 a month starting April 1 until the end of the pandemic. Civil defence personnel will receive RM200 per month for their efforts in enforcing the Movement Control Order until the end of the pandemic, starting April 1 as well.
A one-off payment of almost RM10 bil will be distributed to the B40 and M40 groups. RM1,600 will be given to almost four million households with monthly incomes of less than RM4,000 in April and May 2020, and RM1,000 for those earning more than RM4,000 and less than RM8,000.
Those earning less than RM2,000 and are single will get RM800 per person. This will benefit three million people.
RM500 each will be paid to 400,000 individuals earning between RM2,000 and RM4,000. Under the Bantuan Sara Hidup scheme, RM3.2 bil will be paid by July 2020.
For those in higher education, a one-off RM200 per person will be paid in May, amounting to RM270 mil in total.
There will be an allocation of RM25 mil for the fringe society. PTPTN payments will be suspended for six months with effect from April 1. The same applies for PTPK. This will involve RM149.2 mil and 174,500 borrowers affected.
Those in the B40 group who are quarantined as patients under investigation (PUI) will receive RM50 a day as well.
Under private retirement schemes, pre-retirement funds up to RM1,500 can be withdrawn between April to the end of the year without taxation. PPR rent suspension will be expanded to six months, with RM3 mil covered by the government. There will be six months’ rent exception for all federal government-owned premises.
RM500 mil for the purpose of a 15% discount on electricity bills for the travel industry and 2% for others has already been allocated. A further allocation of RM530 mil will be given for tiered discounts between 15% and 50% with a maximum of 600kW a month – 50% for those below 200kW, 25% between 201kW and 300kW, and 15% for those between 301kw and 600kW. A 2% discount to all households will be maintained.
There will be free internet for all users, to cost some RM600 mil until the end of the MCO. RM400 mil will also be invested to increase the coverage and capabilities of networks.
A RM500 one-off payment will be made to public servants and contractors grade 56 and below, benefitting more than 1.5 million people. A one-off RM500 payment will be made for public service retirees as well, numbering over 850,000.
RM1 bil will go towards a food guarantee fund, and continued assistance will be funnelled to the agricultural sector to encourage domestic output.
RM100 mil to RM200 mil will be provided for preparing food storage and distribution infrastructure, RM100,000 to RM200,000 assistance will also be given to the Growers Associations and Fishing Associations that are working on short-term agrofood projects that can provide output within three to six months, with the total amount involved standing at RM64.4 mil.
A Salary Subsidy Programme will also be introduced, to help employers retain staff. A total of RM600 per person a month will be provided to employees for three months, and targets those earning RM4,000 and below with employers who have seen revenue dropping by more than 50% since Jan 1, 2020.
Employers are not to fire staff or direct them to take unpaid leave for three months after the implementation of this programme. Salaries also cannot be deducted. This is expected to benefit 3.3 million people with an allocation of RM5.9 bil.
“In these tough times, I do not want to see employees losing their jobs and their income,” said Muhyiddin.
The MCO has also affected the income of e-hailing drivers, so 120,000 of such drivers will receive a one-off assistance of RM500 per person for a total allocation of RM60 mil. In the previous economic stimulus package, a one-off payment of RM600 has already been promised to taxi drivers.
The pay for contractors providing services such as cleaning and preparing food will also be borne by the government even though these workers cannot show up for work. More than 80,000 workers will benefit from this initiative that involves an allocation of RM110 mil. Furthermore, the government is willing to extend these contracts by another month as a trade-off for the MCO.
SMEs and micro-businesses will see an additional allocation of RM4.5 bil that covers five main initiatives:
First: The Special Relief Facility for SMEs will see the fund increased by RM3 bil, to a total of RM5 bil, with the interest rate reduced to 3.5% from 3.75%.
Second: Funding ease for SMEs will be increased through an additional RM1 bil allocation to the “Kemudahan Semua Sektor Ekonomi” fund, for a total of RM6.8 bil.
Third: An additional fund of RM500 mil under the Micro Credit Scheme will be prepared, making for a total RM700 mil for easy financing. This will be handled by Bank Simpanan Nasional with an interest rate of 2% without collateral. Eligibility requirements are also loosened to a minimum of six months in operation compared to the previous requirement of at least one year in operation. The maximum financing of RM50,000 per entrepreneur is also increased to RM75,000. This is open to all micro-entrepreneurs, including childcare operators, bus and taxi operators, the creative industry, and online merchants.
Fourth: SMEs with a business record of less than four years are also eligible for the BizMula-i scheme and the BizWanita-i Credit Guarantee Company Malaysia Bhd scheme for RM300,000 in financing.
Fifth: Syarikat Jaminan Pembiayaan Perniagaan Bhd (SJPP) will also prepare a guarantee facility worth RM5 bil, alongside increasing the guarantee rate of SMEs facing difficulties getting loans from 70% to 80%.
To aid companies facing cash flow issues, the government has also prepared several initiatives.
First: The Employees Provident Fund (EPF) will introduce an employers advisory service on April 15, which will cover the options of payment postponement, and the restructuring and rescheduling of employer contribution. This is expected to help save up to RM10 bil in cash flow for employers. This will benefit more than 480,000 affected SMEs and companies, and save more than eight million jobs.
Second: Levies to the Human Resource Development Fund (HRDF) will also be suspended for six months for all sectors starting from April. This is expected to aid cash flow to the tune of RM440 mil.
Third: Income tax instalments are also suspended for three months starting April 1 for all SMEs. This is in addition to the previous initiative where the government has allowed this for the tourism industry for six months. For other affected sectors, amendments to income tax instalments on the third, sixth, and ninth month will be allowed.
Gratitude was also extended to the banking industry for the moratorium in place. In appreciation, any income by the banks from interests or from loans or financing that is involved in the moratorium will only be taxed when the income is received after the moratorium period.
The moratorium will also be extended and implemented for loans from TEKUN, MARA and co-ops, along with any other government agencies that offer loans to SMEs starting April 1.
To aid entrepreneurs in the B40 segment, a social finance programme will be introduced, where the contributions will be channelled to micro-entrepreneurs as startup funds for those using Zakat funds, and matched with micro-financing at a reasonable rate.
The first phase, which will see Bank Islam Malaysia Bhd and the Federal Territories Islamic Religious Council working together, will commence in May 2020, with eligible entrepreneurs given training in entrepreneurship and finance management, alongside support to start up their chosen business.
The government has also established a guarantee scheme worth RM50 bil with a guarantee rate of 80% of the loaned amount for corporations to afford overheads. This scheme is targeted at all businesses from all sectors affected by the pandemic, with the minimum loan amount to be guaranteed at RM20 mil per business. This will be open to applications from May 1 to Dec 31, 2020, or until the entirety of the fund is utilised.
“The steps introduced in this stimulus package is also meant to ensure our nation’s economy continues to function, especially with the cash from Bantuan Prihatin Nasional. Besides that, the government will also focus on domestic investment activities that have a high multiplier effect and preserve jobs,” said Muhyiddin.
As such, a fund of RM2 bil is readied for the upgrading of roads and schools in need in Sabah and Sarawak, the cleaning of religious houses and police stations, and to help tourism to aid contractors between class G1 to G4.
All projects listed out in the 2020 Budget will also be continued, such as the East Coast Rail Link, Mass Rapid Transit Line 2, and National Fiberisation and Connectivity Plan.
A RM25 bil fiscal injection has been promised by the government to help reduce the burden on Malaysians and business owners in facing the pandemic.
“The government will always ensure the current fiscal account is more than sufficient, and will not utilise borrowings to conduct operations,” said Muhyiddin, who also confirmed again that the ministers and deputy ministers of the Cabinet will channel two months’ worth of their salaries into the Covid-19 Fund.
All ministries were also instructed to re-examine their budgets to find savings, which will then be used towards medium-term actions against the pandemic. A promise was also made that the Prihatin stimulus package will be expedited. – March 27, 2020
