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Industries Unite List Of Suggestions To Save Malaysian Businesses

Industries Unite List Of Suggestions To Save Malaysian Businesses

Local businesses cannot survive the national recovery plan, says coalition of 112 trade and business associations.

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The number of businesses in a dire situation 15 months after the first MCO is shocking.

According to Industries Unite, 80% of their members can no longer sustain themselves and meet their financial obligations, as and when they arise. 40% have closed down and further 20% are likely to close, over the next couple of months.

This is exacerbated by the Total Movement Lockdown. Since last year many of their members have laid off staff or have reduced wages drastically and most are unable to pay vendors and suppliers. 

The coalition

Industries Unite is a coalition of 112 members who comprise of Trade and Business Associations representing approximately 3.3 million businesses, mostly the mid to lower economic tier SME’s microbusinesses and entrepreneurs.

The coalition notes that many employees and former employees have been so affected that they are struggling to put food on the table and meet basic needs such as baby milk powder and food. 

Employers themselves are no longer able to sustain their businesses with depleted reserves and high level of debt. Many have even resorted to obtaining loans from loan sharks and unlicensed lenders, in the hope of being able to resuscitate their business.

However, in light of the recovery plan that spans 4 phases and until the end of the year, morale and confidence is at an all time low. The timeline for the recovery plan means more businesses will not be able to survive. 

A list of suggestions

Datuk David Gurupatham, co-founder of Industries Unite

In response to the situation, Datuk David Gurupatham, co-founder of Industries Unite, acknowledged that although the government has taken some steps in the right direction, more could be done to save the people that made up the local businesses in the country from going under. 

In an online press conference, David shares a list of suggestions composed by the coalition that could help alleviate the issues during the Full Movement Control Order (FMCO).

  1. Increase and accelerate capacity of the vaccinations nationwide and Increase procurement of vaccines and inoculation capacity.
    • Procure and increase the supply of vaccines. All vaccines approved by the WHO can be procured without lengthy local trials.
    • Allow registered pharmacies to purchase vaccines from the approved WHO list and offer for sale to licensed private practitioners and doctors.
    • Private GP’s are allowed to vaccinate without red tape. They are to be incentivized to do so. Currently, only 1,000 private GP’s are enlisted and the process of registration and approvals are cumbersome.
    • Begin a nationwide campaign to encourage people to register and to vaccinate. Enlist volunteers if need be.
    • Allow an amnesty to undocumented foreign workers and encourage them to vaccinate.
  1. Financial Assistance to Assist Businesses to stabilize and recover.
    • A further reduction in utility bills, TNB bills, especially commercial rates by 50%.
    • Procure the reduction of data charges by telcos.
    • Reduction or deferment on Federal and State taxes and levies.
    • 6 months deferment of statutory obligations such as EPF and SOCSO.
  1. Automatic Moratorium on financial obligations.
    • The application process defeats and delays the objective.
    • The current targeted moratorium is subjective. If this is to continue, there must be an independent ombudsman.
    • The bank requirements are unattainable by many.
    • In many instances banks have declined their customers’ requests verbally or put the matter in KIV, making it difficult for anyone to make a complaint.
    • The interest rate to be fixed at ‘on a cost of funds’ basis, stop the capitalization of interest, with no added charges such as processing fees and restructuring fees.
  1. Widen the scope and depth of the wages support scheme.
    • The current wage support subsidy isn’t cast wide enough.
    • The categories of the affected business that can apply should be increased based on need.
    • The wage subsidy should be at least 30% of the employees’ nett salary. The employer should be allowed to reduce wages by a maximum of 30% and be obliged to pay 40% at least, with 30% being subsidised by the Government across the board. 
  1. Rental relief.
    • Different traders require different levels of rental rebates.
    • The Government gives grants to landlords to the equivalent level of the rental reduction.
    • The current tax relief for landlords has little or no impact as the tax relief is only useful if these landlords are in profit.
  1. Targeted financial support for B40 and M40; target spending on products and services.
    • Currently it is estimated 600,000 people formerly in the M40 category are now in the B40 category and these numbers are likely to rise exponentially.
    • The current one off payment of RM1,500 is woefully insufficient.
    • Online purchases are favoring business overseas, outflow of capital. Lower priced fake items from phantom sellers mostly located overseas.
    • No action is taken against these online platforms from selling fake goods that are affecting real businesses.
  1. Suspension of tax instalments
    • We ask the Government in these instances to compute and accelerate refunds to ease cashflow. 
    • We ask that the Government consider if it is possible to defer tax payments by affected industries to be deferred for the duration of the total lockdown.
  1. Unlock private capital/digitalise the cooperative/encourage peer to peer lending.
    • Under the Cooperative Act, cooperatives are allowed to borrow from and lend to individuals. Capping rates at below bank lending rates will help individuals especially in the B40.
    • Digitalising the process of peer to peer lending.
    • A digital tokenization of government financial assistance and utilization of credit coupons into the smart chip of the IC’s of recipients of these micro loans, grants and assistance.
  1. Targeted and immediate lifting of restrictions on businesses to operate..
    • The vaccination plans must be targeted also towards prioritizing businesses and the economy. 
    • Do away with essential and non-essential labels.
    • The Covid 19 battle must be targeted, locality by locality, building by building, district by district, State by State.
    • High economic value neighbourhoods to be prioritized, for example when there is a large concentration of businesses workers and people.
    • Businesses should be allowed to operate with enhanced SOP’s in these areas.
  1. Gig economy overlooked.
    • Entertainment, especially music and live events promotes all kinds of industries. However, musicians and those daily paid and contract workers in this industry, often fall through the cracks as they are not registered with government agencies such as the tax department, EPF and Socso.
    • The previous one time monetary assistance does not help sustain their lives that are at a standstill. 
    • Please consider a monthly stipend for people in this category who are severely and critically impacted by the lockdown. 

Other issues

David also noted a few additional issues:

  • The monopoly of  the 2 biggest food delivery apps must be looked into. Most F&B have no choice but to subscribe to them to survive. At present the delivery charges of 30% or more of the price of the food is unsustainable for most as prices of raw materials have also increased. 
  • Improve communication and clarity between the ministries, the government, enforcement agencies and the public.
  • Reduce red tape and bureaucracy.
  • High fines are not the solution. 
  • Prioritise engaging with business associations and place more reliance on data, information feedback and solutions given by businesses and people on the ground.
  • Formulate a 12-month stabilization plan for businesses and 3-year recovery plan. 
  • Provide some effort and support towards mental and physical health awareness.

READ MORE: 300,000 Mall Employees Lost Their Jobs In The Past 16 Months, Mall, Retail Associations Say

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