KUALA LUMPUR, 5 June 2020 – Prime Minister Tan Sri Muhyiddin Yassin has unveiled a host of measures in the government’s Short-Term Economic Recovery Plan aimed at alleviating the worst effects of the COVID-19 pandemic.
The government has come up with “Penjana” (Pelan Jana Semula Ekonomi Negara) to empower people, propel businesses and stimulate the economy. It has 40 initiatives worth RM35 billion, of which RM10 billion is a direct fiscal injection by the government.
The special message by the Prime Minister was broadcast live at 3pm on Friday (5 June) by local television stations and social media networks.
On Tuesday (2 June), Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz said the plan would focus on three key objectives, namely to empower people, propel businesses, and stimulate the economy.
According to Tengku Zafrul, the Short-Term Economic Recovery Plan is the fourth of the six-phase 6R approach (Resolve, Resilience, Restart, Recovery, Revitalise and Reform) in weathering the health and economic challenges due to the COVID-19 pandemic.
Below are the highlights of the Prime Minister’s speech:
– To encourage Malaysians to use contactless payments, the government has allocated RM75 million to e-wallets, or RM50 per person, where Malaysians can begin applying in July 2020. It is set to benefit 15 million Malaysians.
– Government to introduce My30 unlimited pass for public transport users. Commuters can now pay RM30 a month for unlimited rides. It is open to all nationalities, beginning June 15 until the end of 2020.
– 100% tax exemption for the purchase of locally assembled cars beginning June until 31 December.
– Grants will be given to daycare (taska) operators for implementing and adhering to the SOPs (standard operating procedures) set by the government.
– E-vouchers will be available for those who order child-minders’ services online.
– Up to a RM3,000 incentive of individual income tax for fees paid by parents to taska and tadika (kindergartens).
– Campaign Shop Malaysia Online to encourage trade via e-commerce platforms using promo codes and discount vouchers. Government allocating RM70 million, which would be matched by e-commerce platforms.
– Nearly RM9 billion allocated by government to address rising unemployment, it will benefit over 3 million workers nationwide.
– Wage Subsidy Programme which allocates RM600 per worker to be extended for another three months.
– Employers who are not allowed to operate during the conditional movement control order (MCO), are allowed to apply for the wage subsidy programme.
– The packages to stimulate the economy carried out by the government have saved more than 2.4 million jobs, reduced the cash flow burden of around 10 million people, and supported more than 300,000 companies.
– An employment subsidy programme worth RM1.5bil. Companies will get financial subsidies for giving jobs to the unemployed. An expected 300,000 people will benefit.
– There are two incentives given to companies, whereby those that employ unemployed Malaysians under 40 will get RM800 per worker and firms that employ those 40 years and above or persons with disabilities (OKU) will get RM1,000. The incentives will be given for six months.
Gig economy and SMEs
– RM75 million allocated to draft policies related to the so-called gig economy.
– RM50 million matching grant for gig economy workers’ EPF and SOCSO contribution.
– Additional RM50 million to the Malaysian Investment Development Authority (MIDA) for promotional and marketing activities.
– Cash-flow aid by SME Bank for G2 and G3 contractors that have been awarded minor government projects.
– Banking sector allocates RM2 billion to assists SMEs, where applications begin mid-June, with a threshold of RM500,000 per SME.
– Lessen companies’ financial burden through the waiver of penalty to companies that are late in submitting payment for SST as well as extension of various tax exemptions.
– RM400 million microcredit by Tekun and Bank Simpanan Nasional; with RM50 million especially for female entrepreneurs.
– Penjana Nasional fund worth RM600 million to drive the process of digitalisation of businesses and innovation. A matching fund will be matched by local and international investors.
– RM400 million to fund Penjana microcredit by Tekun and Bank Simpanan Nasional with RM50mil allocated especially for female entrepreneurs.
– RM10 million allocated to the Malaysian Global Innovation and Creativity Centre (MaGIC) to fund social enterprises for social projects to address issues faced by vulnerable groups.
– RM1 billion for the tourism industry under Penjana Tourism Funding to ensure that the country’s tourism industry can still be competitive in the new normal.
– RM1 billion for the tourism industry to help related SMEs to operate in the ‘new normal’.
– Full exemption of tourism tax from 1 July 2020 until 30 June 2021.
– Exemption of services tax on lodgings and accommodation services extended from 1 September 2020 until 30 June 2021.