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PETALING JAYA: Two economists have welcomed the RM10 billion initiatives under the Kita Prihatin stimulus package announced on Wednesday.
Barjoyai Bardai of Universiti Tun Abdul Razak said Putrajaya had delivered on its promise to “be a government of solidarity,” adding that the subsidies would bring relief to millions of families facing hardships as a result of the Covid-19 pandemic.
Yes, Kim Leng from Sunway University said the package would alleviate the economic difficulties faced by B40 and M40 households and small and medium-sized businesses and could be seen as tax insurance to shore up domestic demand in the final quarter of 2020 .
Calling the country’s fourth stimulus package “commendable” given the severity and duration of the greater than expected economic effects of Covid-19, Yeah said the Malaysian economy needed to prepare for a longer period of pain.
He said the measures would be especially crucial for those in the informal sector, where relief and support were most needed and should be the administration’s goal.
“Kita Prihatin is a backwind of recovery momentum that started in the third quarter after the sharp 17.1% GDP contraction in the second quarter,” he said.
“The Salary Subsidy 2.0 (Program) is also timely for companies to address the extended RMCO with extended eligibility to those who have suffered income declines of 30% or more.”
Companies that qualify for the incentive will receive a three-month grant of RM600 per month for each employee, up to a maximum of 200 employees.
Prime Minister Muhyiddin Yassin also announced Bantuan Prihatin Nasional 2.0 cash aid in the amount of RM7 billion, comprising RM1,000 each for 3.7 million B40 households, RM500 each for 3.8 million single individuals in B40, RM600 each for 1.4 million M40 households and RM300 for 1.7 million single people in M40.
The wage subsidy is expected to benefit 1.3 million workers and involve an allocation of 2.4 billion ringgit, while 200,000 micro-entrepreneurs will benefit from subsidies worth around 600 million ringgit.
“The microenterprise grant is quite small,” Barjoyai said. “But it’s a good start and I hope it spreads later.
“The initiatives are small enough to last the next three months, but this is the first time that a Malaysian government has repeatedly awarded a grant to the low-income group in this country.
“What I particularly like about the ad is that the government is really practicing what it promised, that is, being a solidarity government. But these are all short-term measures, and we are still waiting for medium and long-term measures to try to reverse the economy. “
