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PETALING JAYA: The 2021 budget has greatly disappointed small and medium-sized enterprises (SMEs) and micro-enterprises that urgently need financial support to survive in the long term, said PKR Vice President Tian Chua.
He said that more than 98% of Malaysian business establishments were SMEs or micro-enterprises, adding that most of them were struggling and urgently needed government help to survive the crisis.
“Micro and SMEs doubt that the funds allocated in the budget are sufficient to address their colossal problems.
“Unfortunately, the finance minister did not show any will or determination to reform the imbalances of the profit structure in the corporate economy,” it said in a statement.
Chua said the government should have been proactive in developing aid packages for specific categories of companies.
“In the meantime, policies must be reformed to create conditions conducive to a market recovery. Reforms and recovery go hand in hand, ”he said.
Chua said that the concessions granted by banks and large financial institutions were too minimal, adding that the Finance Ministry was clearly very reluctant to cut the profits of large corporations and banks to provide the “B40” community with genuine relief. .
Overall, he said the budget can be seen as innovative in some areas, but lacked the much-needed economic recovery strategy.
He said that although the finance minister recognized the importance of infrastructure development, the budget was not “expansive” enough to cover the cost of urgently needed projects in rural areas.
“Most of the countries affected by Covid-19 have introduced much higher spending on health, social protection and job creation.
“We need a much stronger stimulus policy to counter the cyclical recession caused by the pandemic. By comparison, the ministry’s approach to economic recovery is relatively conservative, ”he said.
On the variety of financial donations and aid schemes, Chua said they were impressive, as such policies were intended to reflect the solidarity aspect of the budget.
“But injecting cash handouts would create an effect like ‘helicopter money’ to boost domestic consumption. However, we must also bear in mind that this effect is temporary.
“A more beneficial model would be to strengthen social protection institutions. The government should seize this critical moment to reform our rather archaic welfare system.
“It’s good to hand out cash to help the unemployed, the disabled and the homeless. But specific or short-term measures are simply pain relievers. The country needs a long-term solution to the continuing threats from the Covid-19 pandemic or any other unforeseen upheavals in the future, ”he said.
