EDITORIAL: A timely economic stimulus package
KUALA LUMPUR (Sin Chew Daily/ANN) - The government should not only offer aid to tourism-related industries affected by the Covid-19 outbreak in the recently announced economic stimulus package.
To help Malaysians ride through the difficult times during Covid-19 outbreak, interim Prime Minister Dr Mahathir Mohamad has unveiled an economic stimulus package of RM20 billion (US$4.74 billion). The package offers three strategies – cushion the impact of Covid-19 outbreak, boost economic growth and promote top quality investment.
People are looking forward to the economic stimulus package to be launched by the government to spur the economy and inject more capitals into the market. The unexpected political crisis which started last Sunday has caused a deadlock with only an interim Prime Minister and a government without the Cabinet. Many are worried that the economic stimulus package could be deferred.
The tourism sector is the hardest hit sector, followed by the hotel and retail sectors since Chinese national tourists are unable to visit Malaysia. Local tourists too cancel their trips. Travel agencies are facing difficulties to operate with no patrons. This includes other businesses too.
The economic stimulus package aims to aid the tourism-related industries including exempting hotels and travel agencies from paying Human Resources Development Fund. Hotel service tax is also exempted. The government is paying registered taxi drivers, tour bus drivers and trishaw riders one-off payment of RM600 (US$142.18). The cash aid will be able to help them handle financial emergencies.
Three other measures of the package help to revive the tourism industry. If Malaysians opt for domestic tourism, they are offered RM1,000 (US$236.97) in personal income tax relief Malaysians are also offered digital voucher of RM100(US$23.69) each to pay for domestic flights, train and accommodation in registered hotels. These two measures are believed to encourage more Malaysians to opt for domestic tourism. The move offers various chain-reactions including reviving tourism sector and opportunity to express patriotism. The third measure is relaxing regulations on restrictions imposed on government agencies. More government agencies are allowed to organise events and meetings at hotel in order to help hotels generate more revenue.
The package also announces a lower contribution of the Employees’ Provident Fund from 11 to 7 per cent till the end of the year. This means contributors would have RM10 billion (US$2.37 billion) of cash in hand and more disposable income for Malaysians to spend.
However, some of the economists hold the view that despite the launch of economic stimulus package, it is still not good enough. The package lacks an effective boost and does not help to revive the economy. The reason cited is the economic impact caused by the Covid-19 outbreak is different from the impact of the economic crisis in the past. Hence a long term plan should be adopted to revive the economy.
The Covid-19 outbreak is not over yet and in fact it offers more risks now. We have yet to have a good grasp of the impact caused by the outbreak. Hence the government should adopt a more comprehensive measure instead of only confining assistance to tourism-related sectors. Many small and medium industries are waiting for government’s aid.