Harapan welcomes conciliatory tone by Muhyiddin in his speech
The Pakatan Harapan presidential council welcomes the conciliatory tone by Prime Minister Muhyiddin Yassin in his stimulus package speech.
Muhyiddin acknowledged that “this government may not be the government that you voted for”, that “we are a nation at war with invisible forces,” and “the situation we are now facing is unprecedented in history.”
We, therefore, reiterate the message by Harapan that the government should pursue a more genuine and sincere bipartisan approach towards the handling of the crisis and leaving political competition to another day.
If the government initiates genuine and sincere bipartisan moves, Harapan will reciprocate.
We acknowledge that the stimulus package is touted to be RM250 billion. However, upon careful scrutiny, the actual direct government expenditure is only RM25 billion which will be financed via additional government borrowings.
The stimulus is to a large extent, made possible by the reforms in government procurement and finances over the past 2 years.
For example, the savings from the rationalised mega-projects of LRT3, MRT2 and ECRL amounting to RM45 billion. The newly restructured PLUS concession not only provided 18 percent of immediate discount in toll-rates to commuters, it immediately relieved the government from having to pay any more compensation to the highway operator.
Funds which were previously allocated for such compensation in Budget 2020 can now be re-allocated for the stimulus package.
We welcome the one-off payout of RM1,600 for households below RM4,000 monthly income, RM1,000 for those above RM4,000 monthly income, as well as similar payout to unmarried individuals, as well as students.
Harapan proposed RM1,000 payout in March and RM1,000 payout in April.
The package announced by Muhyiddin is good for “Makcik Kiah”, the character he used to represent ordinary Malaysians, for two months. It is welcoming in that sense.
For a two-month period, the package is decent. But it won’t have much impact beyond a two-month period for “Makcik Kiah” and the rest of Malaysian workers and businesses.
More needs to be done to assist Small and Medium Industries (SMEs) which are bearing the economic brunt of the MCO. Therefore, the RM600 per worker wage subsidy is insufficient to mitigate the impact of the crisis.
We would like to propose that the wage subsidy be increased to RM1,200 per worker. Beyond the RM25 billion fiscal injection, the rest of the stimulus packages include:
- Loan moratorium for individuals (borne by banks) - RM63 billion
- Loan deferments for businesses (borne by banks) - RM35 billion
- EPF withdrawals (savings from the people) - RM40 billion
- Private Retirement Scheme withdrawals (up to RM1500) - RM3 billion
- Perbadanan Tabung Pendidikan Tinggi Nasional (PTPTN) loan deferments - RM750 million
- Perbadanan Tabung Pembangunan Kemahiran (PTPK) loan deferments - RM149 million
- Discounts for electricity - RM530 million
- Free internet (provided by Telco) - RM600 million
- Danajamin Scheme - RM50 billion
- Dana Jaminan Makanan - RM1 billion
- Dana Khas Jaminan Untuk Nelayan - RM64.6 million
- Special Relief loan facility for SMEs - RM5 billion
- Additional allocation for microcredit lending - RM500 million
- Loan facility by Syarikat Jaminan Pembiayaan Perniagaan - RM5 billion
While this is only a rough calculation, as some of the details are unclear from the PM’s speech, this means that around RM205 billion out of the RM250 billion announced are in fact merely deferments or loan guarantees.
There is an assumption in the thinking of the Prime Minister that the businesses would still be interested in borrowing.
But that is only going to happen if the nation emerges from the Movement Control Order (MCO) at some point and the businesses are still surviving while there is still economic demand for goods and services.
It is observed that the government intends to finance the rather small fiscal injection as well as through cutting spending to other ministries which will trigger another round of austerity unnecessary for the economy for now.
The government, according to the Prime Minister, doesn’t intend to borrow further to finance fiscal injection, “in the interest of the long-term,” perhaps for “rainy days”. But this is no longer just a downpour, this crisis is the worst storm that we have seen in our memory.
We hope the government would further consider a much larger fiscal injection in the next few weeks as otherwise the economy would still be in dire straits with more job losses.
We would also urge the government to launch a “war-time” coordination of procurement, production and supply of the following items: food, vegetable and agricultural production, global medical-use glove manufacturing and five essential medical items for massive war-time production escalation which are: masks, testing kits, sanitizers, Personal Protective Equipment, ventilators, online/e-commerce platforms and logistics.
As the package is effectively useful for only two months, Harapan calls on the government to exercise true bipartisan spirit to continue the Parliament sitting on 18th May 2020, or even bring it forward, as soon as the MCO ends.
This is to enable the government and the opposition to form bipartisan action plans for the nation to move forward including formulating a new Budget taking into account all new scenarios and factors involved.
It is the practice of democratic countries to debate the government’s stimulus packages in parliament to ensure proper implementation and monitoring.
This crisis requires an economic approach that will “do whatever it takes”. It is in the interest of the nation and her people that the Government adopts a bipartisan approach to do the maximum so that we can stop the slide into unprecedented recession.
ANWAR IBRAHIM is Parti Keadilan Rakyat President;
MOHAMAD SABU is Amanah President;
LIM GUAN ENG is DAP Secretary-General.
-Mkini
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