MM Online:
A mercy-for-all stimulus to save lives, re-start the economy — Rais Hussin
MARCH 25 — The Malaysian Prime Minister Tan Sri Muhyiddin Yassin announced various unprecedented economic stimulus and relief plan for the benefit of the rakyat at large and to help those in society with the greatest financial exposure. This is against the backdrop of the extension of just announced restricted movement order (RMO) to last till April 14, 2020.
The world is facing an unprecedented crisis. The Covid-19 pandemic occurs amid the backdrop of on-going uncertainties in the global economy brought about by, inter alia, the collapse of the global oil prices, the trade war between US and China, the tension between Iran and US, the ethno-religious riots in India, the dubious Middle East’s Deal of the Century propounded by the Trump Administration and China’s US$2 trillion (RM8.9 trillion) domestic debt bubble. In one go, the world is being confronted not with a double or triple but multiple whammies.
The world is facing an unprecedented crisis. The Covid-19 pandemic occurs amid the backdrop of on-going uncertainties in the global economy brought about by, inter alia, the collapse of the global oil prices, the trade war between US and China, the tension between Iran and US, the ethno-religious riots in India, the dubious Middle East’s Deal of the Century propounded by the Trump Administration and China’s US$2 trillion (RM8.9 trillion) domestic debt bubble. In one go, the world is being confronted not with a double or triple but multiple whammies.
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(l to r) Jared Kushner (Trump's son in law), Binyamin Netanyahu, Donald Trump 2 Jews & an idiot |
All other challenges are being eclipsed by the Covid-19 pandemic. While the impact of these uncertainties usually affects nations differently in the sense that developed countries can weather these perfect storms better, only the Covid-19 crisis has shown that all countries are equally not immune to the virus.
This creates a level playing field in term of dishing out economic stimulus to the infected economy. The question of whether the off-budget stimulus will create excessive inflation, affect sovereign ratings or causing a dent on a country’s economic growth, while important, becomes irrelevant since every country is equally impacted with the virus.
Hence, the first order of business in such a situation is to save lives, while at the same time, resuscitate the economy for its survival and future growth.
It is imperative therefore the economic stimulus that will ensure the survival of the rakyat for now in this difficult and trying time, is placed at the highest priority as oppose to any fiscal prudence, GDP growth or rating agency factors. The focus must be primarily on the rakyat which comprises individuals and their families, and their livelihoods whether as farmers, fishermen, hawkers, entrepreneurs or businessmen.
Economic stimulus for the future growth of the economy and its macroeconomic stability will be topics of future analysis conducted by many, to assist in ensuring a speedy and robust economic recovery posit the Covid-19 health crisis.
Since drastic time requires drastic measure, our suggestion is for the government to draw on some of its reserve to finance the big expenditures to save lives and re-start the economy. In this extraordinary time, austerity consideration will “kill” the ordinary rakyat in the streets and their families along with the economy.
Hence, for now our collective focus should be on the next nine months beginning April 2020. Although we are aware of the uncertainty over how long the Covid-19 saga will last, yet we actually have a precedent in the SARS outbreak where most countries were then on a path of economic stimulus for six months before a return to some semblance of normalcy.
This creates a level playing field in term of dishing out economic stimulus to the infected economy. The question of whether the off-budget stimulus will create excessive inflation, affect sovereign ratings or causing a dent on a country’s economic growth, while important, becomes irrelevant since every country is equally impacted with the virus.
Hence, the first order of business in such a situation is to save lives, while at the same time, resuscitate the economy for its survival and future growth.
It is imperative therefore the economic stimulus that will ensure the survival of the rakyat for now in this difficult and trying time, is placed at the highest priority as oppose to any fiscal prudence, GDP growth or rating agency factors. The focus must be primarily on the rakyat which comprises individuals and their families, and their livelihoods whether as farmers, fishermen, hawkers, entrepreneurs or businessmen.
Economic stimulus for the future growth of the economy and its macroeconomic stability will be topics of future analysis conducted by many, to assist in ensuring a speedy and robust economic recovery posit the Covid-19 health crisis.
Since drastic time requires drastic measure, our suggestion is for the government to draw on some of its reserve to finance the big expenditures to save lives and re-start the economy. In this extraordinary time, austerity consideration will “kill” the ordinary rakyat in the streets and their families along with the economy.
Hence, for now our collective focus should be on the next nine months beginning April 2020. Although we are aware of the uncertainty over how long the Covid-19 saga will last, yet we actually have a precedent in the SARS outbreak where most countries were then on a path of economic stimulus for six months before a return to some semblance of normalcy.
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during the SARS outbreak - parallel to Covid-19? |
Some of the worthy consideration for the administration to make:
For our ordinary rakyat in the streets and their families:
• Those with no EPF account or a meagre balance in their EPF account will be provided a monthly cash pay-out of RM500 for six months beginning April 2020.
• A BR1M-like cash pay-out of RM1,000 in April, RM2,500 in May and RM3,000 in June.
• Suspension of income tax for M40 for fiscal year 2020.
• A six-month moratorium on all bank loans for individuals affected by the Covid-19 outbreak.
• A six-month waiver on interest payment for credit cards loans for those affected by Covid-19.
• From April, loan arrears can be converted to interest-free term loan not exceeding one year.
• Government services related to registration, licenses, permits, etc. should be temporarily discounted to ease cash flow concerns for households.
• Tap into zakat funds for rightful disbursements to the rightful recipients.
For our small businesses:
• A six-month moratorium on all bank loans for SMEs affected by the Covid-19 outbreak.
• A six-month waiver on interest payment for credit cards loans of SMEs affected by Covid-19.
• From April, loan arrears can be converted to interest-free term loan not exceeding one year.
• For SMEs, 25 per cent rebate on utilities for the first 2 months and 15 per cent rebate for another 4 months.
• A discount of 50 per cent for rental of market and stalls covering a period of six (6) months up to September 2020.
• Government to bear the payment of sick leave for small businesses for 14 days.
• Government services related to registration, licenses, permits, etc. should be temporarily discounted to ease cash flow concerns for businesses.
• Business rate abolished for one year for small businesses that are affected by the Covid-19.
• Funds channelled to development finance institutions (DFIs) of RM 100 million for businesses hit worst by the Covid-19.
• Companies with up to 250 employees can apply for loans between RM 250,000 and RM 500,000.
• 30 per cent discounts for payments of land rents to all land uses for the year 2020.
• Reduction in corporate tax at the prevailing rate of 24 per cent to 18 per cent for all hotels for Year of Assessment 2020.
For our frontliners:
• Critical Services Incentive Payment (Bayaran Insentif Perkhidmatan Kritikal) to be increased from RM750 to RM1000 from April until the pandemic ends.
• RM500 monthly allowance for medical doctors, nurses and medical personnel who are working tirelessly in hospitals and clinics from April till Covid-19 pandemic ends. (Sarawak Model)
• RM500 monthly allowance for Immigration officers manning the entry points throughout Malaysia from April till Covid-19 pandemic ends. (Sarawak model)
• RM500 monthly allowance for PDRM and officers working around the clock to ensure safety and security of Malaysians from April till Covid-19 pandemic ends. (Sarawak Model)
• RM500 monthly allowance for Malaysian Arm Forces (ATM) personnel manning the borders and those helping the police in maintaining law and order from April till Covid-19 pandemic ends. (Sarawak Model)
• Free food: Providing dedicated support of food supplies for doctors and healthcare personnel involved in the testing, diagnosing, and treating patients at risk of Covid-19 from April till Covid-19 pandemic ends.
The expected economic stimulus to be presented by the administration will definitely be huge although it will be implemented for a limited period of time, between 6-12 months.
But because the merciful nature of this stimulus lies in its focus and emphasis on putting money into the pockets of the most vulnerable segments of our society during the pandemic, it radiates and begets another mercy – the multiplier effect of their spending will revive and accelerate the infected economy to a myriad of vigorous economic activities that will pull the country together towards peace and prosperity.
The focus is to survive and ready for a re-start of the economy.
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kaytee notes:
What do my visitors-readers think?
I have always much respect for the views, analyses and opinions of Rais Hussin, even though he is from the racist Parti PRIBUMI. Yes, Rais is one of the PPBM members whose strategic intellectual prowess is as good if not better than Liew Chin Tong of the DAP. Besides, he has the guts and self-esteem to offer a counter viewpoint to Mahathir (who I suspect dislikes him immensely), wakakaka.
It is a two-pronged crisis i.e. COVID-19 and Oil Price. Nobody should blame the government.
ReplyDeleteExtend the MCO until COVID-19 is fully clear, perhaps until June.
Introduce, provide and implement ALL whatsoever financial support and relief that the government could afford to give to the rakyat and businesses, etc.. for them to ride on during this difficult period.
Let the economy reach the bottom most.
Ask all foreign workers and expatriates to leave.
Restart the economy.
Reintroduce the GST so that we are not overly dependent on black gold anymore.
Nobody should blame PN for causing COV19 or the oil price crash. But we must be critical of the way they are mis-handling the crisis.
ReplyDeleteThe US Houses of Congress and Senate worked through the weekend to eventually pass the 2 trillion rescue package. Yes, even Trump signed off on it. Such a huge decision required bi-partisan support.
However, here in Malaysia the PN "government" POSTPONES parliament for two MONTHS. MPS relax at home, like Bung Mokhtar, using the excuse of MCO. They don't even visit their struggling constituents. They cancel allocations to the opposition MPs and ADUNs, forcing them to close their service centers. MBs and CMs of opposition states are not invited to COV19 crisis meeting.
"Government For All"?
The so-called 100B rescue package announced by Muhyiddin/EAC is actually a bail-out of the banks. As many businesses and individuals won't be able to service their bank loans our banks will soon have to classify a huge number of non-performing loans. Their share price will suffer.
However, the six-month moratorium on loans means that banks are allowed to increase their cap on non-performing loans, for which interest will still be charged. The 100B will be used to compensate any losses the banks may suffer. Their losses are protected, thanks to EAC, with taxpayer's 100B. But Muhyiddin makes it sound like the 100B comes from the government, they are being so kind and generous. Be grateful.
Just like be grateful for the RM500 per month that the government is "giving" you but is actually your own money, from your EPF Account 2.
Our new FM Tengku Zafrul is the former CEO of CIMB, he still has a million CIMB shares. Before that he held senior positions in Maybank and Citibank. He has many many friends in the industry. There may be a conflict of interest at play here. Has he declared his assets yet?
Note this 100B package was announced before the comprehensive package that will be announced in just a few days time, end of March.
No time to waste. Banks' Quarterly books closing end on March. With the announcement of the 100B bail-out package on March 25, the quarterly reports can be made to sound more positive. Non-performing loans all covered, Well done EAC, well done Tengku Zafrul. Mission Accomplished.
All these Hail Mary decisions must not be made in a unitary fashion by a suspect government.
ReplyDeleteConvene parliament now.
We elected 222 MPs but now we are run by NSC and EAC.
How to pay for all these suggestions Rais?
ReplyDeleteDon't Be Shy.....say it.....Geeee....Asssss....Teeee.
But not at 4% ya, that would only be revenue neutral, what's the point if it is the same as SST, which I believe was what the PH Manifesto proposed, the Manifesto that you so loudly boasted.
Set it at 20%, to cover the lost oil revenues. GST must now be the flavour of the PN government. They championed it so much. Fair to rich and poor, even the unemployed.
Note: Even though Europe is now the epicentre of COV19, NONE of the European countries are talking about abolishing GST/VAT, even though theirs is at 20%. So it must be good. We must follow.
Go On, just re-introduce the same GST Bill at the next Parliament sitting, implement it immediately, PH took only a few months to abolish it, PN should be faster to re-introduce, don't wait till 2021 Budget.