Datuk John Lau
KUCHING (June 5): The federal government must step in to provided zero interest loans to affected companies as a buffer against the Covid-19 pandemic, said Parti Sarawak Bersatu (PSB) Kota Sentosa representative Datuk Dr John Lau.
He said small and medium enterprises (SMEs) had appealed to the federal government to introduce further financial assistance and incentive as consumers spent less due to economic uncertainty.
“The uncertainty has a knock-on effect on the entire business value chain as less economic activity is generated. We need the government to take a drastic action to prevent the economy from entering into an unrecoverable death spiral,” he said in a statement.
Lau also proposed the federal government to offer another round of automatic loan moratorium from June to December this year to allow consumers and businesses to enjoy greater disposable income.
“The moratorium must be accompanied by incentives to encourage consumers to spend, such as exemptions to excise duties and Sales and Service Tax (SST).”
Besides, he said, the federal government had provided RM11 billion of direct financial assistance to the business community during the first implementation of Movement Control Order (MCO) last year.
“However, in the latest round of assistance, the federal government will only inject RM5 billion through direct financial assistance, most of which are not targeted at businesses.”
He said all businesses were part of a value chain and many SMEs no longer have the reserves to weather further restrictions on their businesses after 15 months of various versions for MCO.
Without further direct assistance, Lau said some of these businesses might be shuttered forever and resulting in a detrimental effect on the entire economy, including the financial sector.
Thus, Lau hoped the federal government would involve SMEs in the efforts to overcome the pandemic so that all financial assistance packages would have trickle-down effect to the small businesses.