The short-term Economic Recovery Plan (Penjana) as announced today focuses on three main objectives: “Empower people,” “Propel businesses,” and “Stimulate the economy.” The government will achieve these through four key thrusts which include enabling work and reduce employment; ensure affordability and providing liquidity; digitalisation and operating in the “new norm;” and increasing consumer and investor confidence.
The MYR35 billion short-term Economic Recovery Plan is the fourth of the six-phase 6R approach (Resolve, Resilience, Restart, Recovery, Revitalise, and Reform) in weathering the challenges of the COVID-19 pandemic.
Here are highlights from prime minister Muhyiddin Yassin’s address.
According to the Statistics Department, the unemployment rate as of March 2020 stood at 3.9 per cent or 610,000. The department estimates, the unemployment rate will increase to 5.5 per cent or more than 860,000 for the rest of 2020. Up until 2 June 2020, around 12.7 or 83.5 per cent of the workforce has started working, as compared to 10.2 million on 17 May 2020. The MYR260 billion Prihatin and Prihatin Plus economic stimulus packages have helped save 2.4 million jobs, reduced the cashflow burden of nearly 11 million people, and supported over 300,000 businesses.
To address rising unemployment, government has allocated nearly MYR9 billion, which will benefit over 3 million workers nationwide.
The ongoing Wage Subsidy Programme (WSP) that has positively impacted 2.2 million jobs has been extended for an additional three months, at a cost of MYR5 billion. The programme allocates a subsidy of MYR600 per worker, up to 200 workers per company.
Employers, particularly in the tourism sector and other sectors that are no allowed to operate during the Conditional Movement Control Order (CMCO), can also apply for the WSP.
The government is encouraging companies to hire by introducing an Employment Subsidy Programme (ESP) worth MYR1.5 billion. Companies can obtain financial subsidies for providing jobs to the unemployed and the youth. Around 300,000 people are expected to benefit from the programme.
ESP involves two incentives:
These incentives will be distributed for six months.
Next, to help upskill the workforce, individuals who have lost their jobs can claim up to MYR4,000 training allowance from SOCSO, even if they are not contributing under the government insurance scheme.
To add to that, a MYR2 billion allocation to upskill the unemployed and youth will benefit 200,000 people.
That aside, the government is incentivising employers to offer apprenticeships for school leavers and graduates with a MYR600 per month incentive.
Moving on, grants will be given to daycare operators and kindergarten to implement and adhering to standard operating procedures (SOP) set by the government. This is to give parents more peace of mind to send their children to daycare centres. Additionally, e-vouchers will be available for those who book daycare services online. Parents can also claim up to MYR3,000 incentive of individual income tax for fees paid to daycare and kindergartens.
The government is introducing the My30 unlimited travel pass for public transport users, complementing the current MY50 and MY100 travel passes. Commuters can now pay just MYR30 a month for unlimited rides on all Prasarana operated buses and LRT/MRT/Monorail in the Klang Valley. It is open to all nationalities, valid from 15 June until the end of 2020.
More than 300,000 persons with disabilities (OKU) and single mothers identified by the Social Welfare Department (JKM) will be entitled to a one-off relief payment of MYR300, expected to be distributed before Hari Raya Aidiladha. The government will also be allocating a grant to relevant non-governmental organisations.
An additional MYR50 million has been allocated to the PEKA B40 scheme for medical screening and the provision of medical equipment.
Penjana will also channel MYR75 million to promote the gig economy and ensure the welfare of the workforce in this sector. The government will provide a matching grant of up to MYR50 million for gig economy platforms which contribute towards the SOSCO employment injury scheme and the Employee Provident Fund’s (EPF) i-Saraan contribution. The Malaysia Digital Economy Corporation (MDEC) will be provided with MYR25 million for the Global Online Workforce (GLOW) programme.
To encourage small and medium enterprises (SMEs) and micro-enterprises to migrate to digital or online services, the government is allocating MYR140 million matching grant. This allocation will be used for training, sales subsidies, and sales assistance. This initiative will be spearheaded by MDEC alongside select e-commerce platforms.
That aside, the Shop Malaysia Online campaign will encourage the people to shop online, where promo codes and discount vouchers will be provided via e-commerce platforms. The government is allocating MYR70 million which will be matched by e-commerce platforms.
One of the new initiatives under the economic recovery plan is ePenjana, designed to encourage cashless and digital payments. Similar to e-Tunai Rakyat, eligible Malaysians can receive free credits in their e-wallets.
The government has also extended the free 1GB Internet data offer, facilitated through participating telcos, until 31 December 2020.
A further MYR700 million allocation in the form of grants and loans is allocated for SMEs and mid-tier companies for the purpose of digitalisation. This includes:
For SMEs in the essential services sector, the banking sector will allocate MYR2 billion through the Penjana SME Financing scheme. Applications begin mid-June with a threshold of MYR500,000 per SME.
The hard-hit tourism sector gets a MYR1 billion boost under the Penjana Tourism Financing scheme. More details will be revealed by Bank Negara Malaysia (BNM) in July.
The Penjana Micro Financing scheme, created in partnership with Bank Simpanan Nasional and Tekun Nasional will see a MYR400 million allocation for micro-enterprises, with MYR50 specifically for female entrepreneurs.
Starting July, the SME Bank through the SME-GO scheme is providing cashflow aid for 16,000 Grade G2 and G3 contractors that have been awarded government projects under the Prihatin plan. No collateral or deposit is required.
Furthermore, the Malaysian Global Innovation and Creativity Centre (MaGIC) is allocated MYR10 million to fund social enterprises for social projects that address issues faced by vulnerable communities.
Lastly, the government will establish the Penjana Nasional Fund worth MYR1.2 billion with a MYR600 million allocation from the government, and matching MYR600 million from local and international investors. This fund is to drive digitalisation and innovation. Interesting international investors include the SK Group, Hanwha Asset Management, KB Investment Co Ltd, Provident Growth, 500 Startups, and The Hive.