June 12, 2021

Extension Of MCO3.0 Should Come With Increased Quantum Of Wage Subsidy

MCO3.0 or “total lockdown” was initially slated to end June 14, has now been extended for another two weeks. Senior Minister (security cluster) Datuk Seri Ismail Sabri Yaakob also announced that the SOPs remain the same as the one currently enforced, which means many industries are forced to closed down for at least another 14 days.

While it is understandably that the extension is crucial as the daily number of COVI1-19 cases still hover above 5,000 cases, I am afraid that the industries, namely the non-essential sectors, and particularly the Small and Medium Enterprises (SMEs) category, could not survive this round of pandemic onslaught.

Malaysian retail industry recorded a negative growth rate of 9.9% for 1Q21 in retail sales, as compared to the same period in 2020. Malaysia Retail Industry Report mentioned that the hope for recovery this year was completely dashed recently when daily confirmed covid-19 cases jumped to historical highs.

PN government has declared a Wage Subsidy Program (WSP) of RM600 per month, but that is before the announcement of the 14-day extension. The amount is paltry and grossly insufficient now as many SMEs need to live without income for another 14 days. For instance, a 20-outlet local retail brand, each outlet employing 6 staffs, with RM1,800 average monthly salary per staff, minus the current RM600 subsidy, would need to bear the brunt of an additional RM144,000 without any income during the 1-month closure. Mind you, this is the minimum, as it does not include administrative and logistics back-end staffing, as well as other operational (rental, mall management fees, and etc.) and finance costs.

In view of the extremely challenging outlook and vulnerabilities of our SMEs, I urge Prime Minister Tan Sri Muhyiddin Yassin to increase the Wage Subsidy Program to RM1,200, at least to the non-essential sectors to protect jobs and local enterprises. This quantum is reasonable and equivalent to the quantum disbursed in last year’s WSP 1.0. After all, PN government should acknowledge the failure in causing the second and third wave of infections and take compensatory undertaking. Do not make the SMEs and their employees the sole victims of this crisis.

YB Lee Chean Chung
Treasurer General KEADILAN
ADUN Semambu

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