BUDGET 2022 must have measures that enhance business confidence to boost the local economy through stimulus packages, as businesses need lead time to move up the value chain.
Malaysian Employers Federation (MEF) president Datuk Dr Syed Hussain Syed Husman said the most urgent step to kickstart economic recovery is the reopening of all economic sectors that would enable employers to create more jobs.
“This will ensure employment to those who lost their jobs during the lockdowns, which in turn will increase their purchasing power,” he told The Malaysian Reserve (TMR).
He noted that currently, the purchasing power among domestic consumers is constrained due to loss in employment, reduction in income and strict adherence to standard operating procedures (SOPs).
Consumer spending is one of the most important driving forces for economic growth and companies which have taken up the challenge of meeting consumer demands have transformed their business models by shifting to e-commerce and delivery services during the pandemic.
For Budget 2022, Syed Hussain said the government should focus on assisting micro, small and medium enterprises (MSMEs), especially the micro businesses, to get back on their feet.
In Malaysia, MSMEs make up more than 98% of all businesses and there are more than 650,000 micro enterprises.
He said the government should provide additional wage subsidy and zero interest loan moratorium, so that employers could continue with operations and retain employees.
Businesses also need more financial support from the government, such as cheaper business loans as working capital to rebuild.
“Incentives such as lower taxes, lower Sales and Services Tax or SST, cash or lump sum grants to businesses like what the Sarawak government did by giving RM10,000 to all businesses registered there.
“More aids for businesses are also required, such as rental subsidy and utility subsidy,” TMR was told.
Syed Hussain said the government and government-linked companies should create more jobs to activate the business cycle and reactivate some of the mega projects. “The services sector, which constitutes close to 60% of GDP, should be prioritised for assistance, especially the tourism and hospitality sector which suffered heavy losses during the pandemic.
“The government should also focus on assisting the badly impacted economic sectors, especially the aviation and retail sectors,” he added.
Syed Hussain also said the government should urgently address the shortage of over 40,000 workers in the plantation sector, as it had caused the industry to suffer more than RM10 billion losses last year due to unharvested palm oil fruits.
Source: MEF: Include measures to enhance SMEs, micro businesses in Budget 2022