MP SPEAKS | Urgent need to formulate new RM45b aid package

MP SPEAKS | The Prime Minister's Office has announced a three-phase nationwide lockdown that will start with a "total lockdown" from June 1 to 14, where all sectors are not allowed to operate except for essential economic and services sectors listed by the National Security Council.

This total lockdown is a whole-of-government failure by the Perikatan Nasional government in controlling the third wave of the Covid-19 pandemic.

Despite having declared an emergency and suspended Parliament on Jan 12, Malaysia is now one of the worst nations in the world per capita. Nearly four months after closing down Parliament, Malaysia continues to register new records in Covid-19 cases, with 8,290 new cases, 61 new deaths, 549,514 cumulative cases and 2,552 cumulative deaths yesterday. 

Clearly, Parliament is neither the problem nor the cause of this third wave of the pandemic.

Vaccination is the only remedy and solution to the Covid19 crisis. The unforgivable lackadaisical attitude by the PN government in procuring vaccines has caused delays in the delivery and a slow vaccination rate. A swift and smooth National Covid-19 Immunisation Programme (NIP) could have avoided unnecessary loss of lives.

Since the MCO 3.0 total lockdown will be similar to MCO 1.0, the economic losses daily are estimated at RM2.4 billion. There is an urgent need to formulate a new RM45 billion financial aid package like last year, for the people and all economic sectors affected by the lockdown. 

Even though this RM45 billion financial aid package will cause the budget deficit to increase by another 3-4 percent, the direct fund injection will help to save jobs, businesses and economic livelihood.

This new RM45 billion financial aid package should last until the end of the year when NIP is supposed to be completed, with 80 percent of the population vaccinated to achieve herd immunity. The cash injection of RM45 billon into the economy must directly benefit workers and business encompassing:

• As promised by the prime minister, an increase in monthly welfare payments to RM1,000, including the unemployed, costing RM7 billion for the remaining seven months of the year;
• an automatic extension of the moratorium of bank loan repayments, excluding the top 20 percent, until NIP is completed by the end of the year. This will help eight million Malaysian individuals and companies. The cost should be borne by the banking industry, which still recorded a profit after tax of nearly RM23 billion for 2020 as compared to RM32.3 billion in 2019;
• work hiring incentives over a period of two years, comprising wage incentives of RM500 a month to local employees and hiring incentives of RM300 per month to employers, creating employment for 300,000 Malaysian workers costing RM6.5 billion per annum. Youth unemployment is still at a high of 13.4 percent in March 2021;
• RM3.5 billion for the Health Ministry to increase hospital capacity and capability as well as medical equipment and human resources to avert the collapse of our public healthcare system; and
• RM28 billion in the form of financial grants; wage, rental and utility subsidies; loan guarantees and credit extensions; for the small and medium enterprises, construction, retail and the crippled tourism industry. The tourism industry lost RM100 billion in revenue last year and without “life-support” from the government, faces a bleak future

This preliminary RM45 billion financial aid package for a total lockdown is not huge when compared to RM340 billion spent under MCO 1.0 and MCO 2.0. Further additional sums can be added on later, depending on the length of the total lockdown, if the RM45 billion financial aid package is deemed inadequate.

The whole-of-government failure has caused this catastrophic Covid-19 crisis. This RM45 billion financial aid package is needed to encourage a whole-of-society approach to soften the adverse economic impact of a total lockdown and avert a deepening economic recession.

LIM GUAN ENG is DAP secretary-general, Bagan MP, and a former finance minister.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.