PETALING JAYA, Sept 25: Two economists have welcomed the RM10 billion worth of initiatives under the Kita Prihatin stimulus package announced on Wednesday.
Barjoyai Bardai of Universiti Tun Abdul Razak said Putrajaya had made good its pledge “to be a caring government”, adding that the subsidies would bring relief to millions of families facing difficulties as a result of the Covid-19 pandemic.
Yeah Kim Leng of Sunway University said the package would alleviate economic hardships faced by B40 and M40 households and SME businesses and could be viewed as fiscal insurance to shore up domestic demand in the final quarter of 2020.
Calling the country’s fourth such stimulus package “laudable” given the greater-than-expected severity and duration of Covid-19’s economic effects, Yeah said the Malaysian economy needed to brace 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 which should be targeted by the administration.
“Kita Prihatin is a tailwind to the recovery momentum commencing in the third quarter after the sharp GDP contraction of 17.1% in the second quarter,” he said.
“The Wage Subsidy 2.0 is also timely for businesses to cope with the extended RMCO with eligibility extended to those that have suffered income declines of 30% or more.”
Companies qualifying for the incentive will be given three months’ subsidy of RM600 a month for each employee, for a maximum of 200 employees.
Prime Minister Muhyiddin Yassin also announced the Bantuan Prihatin Nasional 2.0 cash aid amounting to RM7 billion, comprising RM1,000 each for 3.7 million B40 households, RM500 each for 3.8 million unmarried individuals in B40, RM600 each for 1.4 million M40 households and RM300 for 1.7 million unmarried individuals in M40.
The wage subsidy is expected to benefit 1.3 million workers and involve an allocation of RM2.4 billion while 200,000 micro entrepreneurs are set to benefit from grants amounting to some RM600 million.
“The grant for micro businesses is rather small,” Barjoyai said. “But it is a good start and hopefully this will be extended later.
“The initiatives are rather small to last for the next three months, but this is the first time any government in Malaysia has ever given a grant to the low-income group in this country repeatedly.
“What I like particularly about the announcement is that the government is really practising what it pledged, that is, to be a caring government. But these are all short term measures, and we are still waiting for medium and long-term measures to try and turn around the economy.”