Prime Minister YB Tan Sri Muhyiddin Yassin recently announced the PEMERKASA (Program Strategy Memperkasa Rakyat dan Ekonomi) program, a stimulus package for the nation that targets vulnerable groups and economic sectors that have been hard hit by the pandemic.
PEMERKASA has an allocation of RM 20 billion, with a new injection of RM 11 billion from the government.
As part of this program, 20 strategic initiatives with 5 priorities will be introduced:
- Control the spread of COVID-19;
- Pioneer of economic recovery;
- Strengthening the country's competitiveness;
- Ensuring inclusiveness; and
- Change the economy.
Control the spread of COVID-19
1. COVID-19 immunization program
Up until a few days ago, around 300,000 Malaysians had already received the first dose of the vaccine.
However, the government will increase the allocation for the vaccine from RM 3 billion to RM 5 billion in order to achieve the herd immunity target by December 2021 faster than in the first quarter of 2022.
15,000 healthcare workers will be housed in 950 vaccination centers across the country, and RM200 per month will be given out to those involved in the vaccination program.
2. No more nationwide MCO implementation
To reduce the negative impact of MCO on the economy, the government will no longer introduce a nationwide MCO. Instead, restrictions are only set in relevant areas with clusters.
3. Stricter and more transparent law enforcement
To protect workers' welfare, MITI will launch the Safe @ Work initiative, where employers must be responsible for providing a conducive work environment and place to stay for their workers.
Companies that register with Safe @ Work first check that their contract workers are COVID-19 free before they are in the same room as the rest of the workers in their company.
The government will also grant each company up to RM 50,000 additional tax deductions for manufacturing companies and production-related service companies on the cost of renting their premises and dormitories for employees. Companies can start registering on April 1, 2021.
Additional tax deductions are also granted to employers who pay for their employees' COVID-19 screening tests by December 31, 2021.
Spearhead Economic recovery
4. Implementation of small projects nationwide
In order to promote more basic and small projects nationwide, the government promises to increase these projects from RM 2.5 billion to RM 5 billion.
These small projects include repairing infrastructure and public facilities damaged by flooding, road repairs, etc., dedicated to class G1 to G4 contractors.
5.Special grants 3.0 (Geran Khas Prihatin 3.0)
Eligible small businesses and SMEs that have difficulty keeping their business open and operational receive one-time financial support of up to RM 1,000.
For those who have never received this grant, they can apply from April 1, 2021. This grant is expected to benefit more than one million businesses in the nation.
6. Microfinance facilities
An additional funding fund of RM 500 million for microcredit finance facilities is provided through programs from BSN, TEKUN, MARA and SME Corp. provided.
7. Incentives to keep jobs and employment
The government will expand the scope of employment incentives to include temporary work and gig work:
- An allocation of RM 300 million that will benefit 60,000 workers at RM 600 per month for 6 months.
- Every employer receives RM200 for every employee they successfully hired to cover temporary or gig work.
- 700 million RM for the extension of the 3.0 wage subsidy program for a further 3 months for tourism, wholesale and retail companies such as the fitness studio and the spa.
- A training grant of RM800 per month has been extended from 3 months to 6 months.
- Creation of the platforms UpskillMalaysia and e-LaTiH as an information center for further education and 300 free training courses.
8. Revitalization of the tourism and retail sectors
The tax exemptions for tourism and services will be extended to accommodation operated by hotel operators until December 31, 2021. Tax incentives will also be extended to tour operating companies until 2022.
There are also exemptions from the entertainment obligation for entrance fees for entertainment venues such as theme parks, stage performances, sporting events and competitions as well as cinema screenings in all federal areas.
The scope of the special individual income tax relief will be expanded and increased to 1,000 RM to cover travel packages purchased through travel agents registered with MOTAC.
For affected companies in the tourism and retail sector, an exemption from the HRDF tax (Human Resources Development Fund) will be granted until June 2021.
One-time financial support of up to RM 600 is also granted to MOTAC-registered host family businesses, which are expected to benefit 4,000 host family businesses.
Finally, the special 10% discount on electricity bills will be extended for a further three months until June 30, 2021 in order to cushion the costs for the tourism industry.
9. Reduce corporate burdens and strengthen cooperatives
The fundraising limit will be increased from RM 10 million to RM 20 million and the crowdfunding of shares will be extended to unlisted limited liability companies.
The Companies Commission of Malaysia (SSM) has also agreed to raise the debt threshold from RM 10,000 to RM 50,000.
SSM will also offer free business registration to the B40 group and full-time IPT students who want to venture into entrepreneurship.
Strengthening the country's competitiveness
10. Strengthening our business environment
The National Authorized Economic Operator Program, which provides eligible companies with a greener route to export and import transactions, reduces investment turnaround time.
11. Automation and digitization
To help SMEs obtain credit, Bank Negara Malaysia increased the Targeted Assistance and Rehabilitation Facility (TRRF) by RM2 billion and the Automation and Digitization Facility (ADF) by RM700 million. With this addition, the facilities provided by Bank Negara for the benefit of SMEs amount to RM 6 billion.
As part of the MIDF, a total of RM 200 million will be provided for funding programs for the development of automation, digitization and the use of environmentally friendly technologies. MIDF has also agreed to lower the loan interest rate from 5% to 3% for 12 months from April 1, 2021.
To encourage SMEs to step up automation, which can reduce dependency on foreign workers, the SME bank will set up a loan fund of RM 200 million to finance the purchase of machines with a grant incentive of up to 20% on value the machine.
12. Reducing the digital gap
The grant of RM 180 for the purchase of a smartphone is increased to RM 300, especially for households with school children who need to buy smartphones or new devices.
To improve the quality of broadband services, especially in rural areas, the Malaysian Communications and Multimedia Commission (MCMC) has allocated RM 3.2 billion for 2021 to upgrade existing broadcasting stations and provide fiber optic access.
MCMC will also launch the MyBAIKHATI program as a device crowdsourcing initiative. It is a collection campaign for used equipment such as laptops to be repaired and distributed to relevant beneficiaries.
13. Promote investment and export markets
The measures to be implemented include the eBizLink initiative, a virtual and hybrid digital marketing platform, and the Globepreneur initiative to highlight more potential SMEs on the international market.
The upper limit for the market development grant will be increased from 300,000 RM to 500,000 RM for each company that participates in international exhibitions.
14. Promote sustainable finance
To support the country's commitment to achieving our Sustainable Development Goals (SDGs) by 2030, the MySDG Trust Fund is being set up to serve as a platform for various sources to fund projects that meet the SDG criteria.
15. Assistance in the event of loss of income
The government provides 1.2 billion RM for 2.4 million recipients. One-time financial assistance of RM 500 is given to those in the B40 group who have lost their income, and additional financial assistance of RM 500 is given to recipients of Bantuan Prihatin Rakyat (BPR) who are RM 1,000 and less to earn.
For those with bankruptcy status, the Malaysian Bankruptcy Department will facilitate dealing with the bank for government assistance.
These individuals are given the flexibility to open a bank account online via an email application to the branch of the bankruptcy department that is managing their case. No monthly installment deduction will be made for credited cash support.
16. Improvement of the urban development aid program
DBKL sets up Anjung Kelana in Taman Desa Kuala Lumpur as an emergency shelter for the homeless.
An allocation of RM 100 million for utility programs for kitchen appliances will be granted through cashless purchase initiatives. The program is expected to benefit 300,000 poor households in major cities across the country to help them purchase staple food.
Those in the B40 group who are allowed to be quarantined at home due to COVID-19 can receive RM50 per day for a maximum of 14 days, provided this is confirmed by the doctor.
A total of 30 million RM will be made available for the nationwide expansion of health services such as MyMedic @ Wilayah as part of the KPT PRIHATIN, KOMUNITI SEJAHTERA (KRIS) program in collaboration with a group of medical experts from the Pengajar University Hospital.
17. Welfare of women
To empower women entrepreneurs, RM 30 million will be made available from the SME and Micro-Business E-Commerce Campaign and the Malaysia Online Shop Program to ease their transition to the online market. In addition, BSN will provide a total of RM50 million for the PEMERKASA-NITA microfinance program to encourage women entrepreneurs to venture into businesses.
In addition, an allocation of 10 million RM in the form of a 70% matching fund for female entrepreneurs and self-employed women is provided under the SOCSO system for self-employed social security.
18. OKU welfare
The maximum salary entitlement in the disability allowance will be increased from 1,200 RM to 1,500 RM per month. The total allocation of RM 26 million will benefit almost 5,000 disabled people.
RM 20 million will also be allocated to the Department of Women's, Family and Community Development to support entrepreneurship programs that strengthen the marketing of baked goods and handicrafts for the disabled and the elderly.
In addition, people with disabilities can register with SSM for free and renew their business.
As part of the special microcredit program, BSN has provided a total of RM 25 million for people with disabilities to venture into a company with a funding limit of up to RM 50,000 and an interest rate of only 3%.
19. Wellbeing of the youth
The Urban Community's Economic Empowerment Program (PEKB) will be expanded to include an additional allocation of RM 10 million, bringing the total allocation for this program to RM 21 million in 2021.
A total of 1,800 attendees will benefit from entrepreneurship training and equipment, provided free of charge, to help them follow the areas and courses involved.
In addition, the Tunas Usahawan Belia Bumiputera program is being made available to generate a total of 250 new young Bumiputera entrepreneurs.
In the meantime, the New Gen Entrepreneur Online Bootcamp program will be launched to prepare training and online business coaching for 2,000 young entrepreneurs.
Finally, BSN will also offer the PEMERKASA BELIA microfinance program at a rate of only 3% so that young people venturing into the economy can receive funding of up to RM 50,000.
20. Continuation of subsidies to reduce the cost of living
To protect consumers from the effects of rising oil prices, the retail price for petrol and diesel is set at 95 RON to a maximum of 2.05 RM per liter and 2.15 RM per liter.
The government currently pays a grant of almost 30 cents per liter. In total, the government will receive a total grant of RM 3 billion at current prices.
- You can read more about PEMERKASA here.
Selected image source: Muhyiddin Yassin, Prime Minister