News & Events

Pemerkasa Plus Programme Welcomed but Falls Short of Expectation of Industries Impacted by the Total Lockdown

Kuala Lumpur – The Federation of Malaysian Manufacturers (FMM) welcomes the timely announcement on the RM40 billion aid package by the Government under the Pemerkasa Plus Programme with RM5 billion direct fiscal injection by the Government.

The industry in particular welcomes the following initiatives that would assist businesses impacted by the Full Movement Control Order (FMCO):

  1. Extension of the Wage Subsidy Programme with an allocation of RM1.5 billion for all affected industries, capped at 500 staff per company.
  2. Three-month automatic loan moratorium or 50% reduction of instalment repayment of loans for a period of 6 months for those in the B40 and affected by loss of income, as well as SMEs not operating during the lockdown.
  3. One-month exemption of the Human Resources Development Corporation levy payment for businesses affected
  4. Additional RM2 billion allocated for the Targeted Relief and Recovery Facilities by BNM for SMEs
    Extension of the effective period of the Temporary Measures for Reducing the Impact of COVID-19 Act 2020 (Act 829) until December 31, 2021

The industry also lauds the initiative to increase the vaccination rate to 150,000/day by June 2021 and hopes that the Government will accelerate the mass immunisation programme through a parallel vaccination implementation by private hospitals and clinics and the vaccination for the economic sectors through the Public Private Partnership (PPP) Immunisation Initiative to achieve faster herd immunity.

Unfortunately, the assistance and initiatives announced have fallen short of the business sector’s expectation and requests on direct assistance to industries that are impacted by the Full Movement Control Order (FMCO), especially those that are unable to operate during this period. The FMCO is more stringent and has a far greater impact than the previous MCOs as businesses have not recovered from the earlier impact of the previous lockdowns and their finances reserves, especially for SMEs, have been depleted over the last one year. In particular, the industry calls on the Government to urgently include the following assistance/initiatives:

  • Automatic loan moratorium to be extended to all businesses impacted by the lockdown regardless of size;
  • Temporary Measures for Reducing the Impact of COVID-19 Act 2020 to be expanded to provide for relief for manufacturing and other manufacturing related services such as trading or distributorship and logistics which are currently not included;
  • Waiver of TNB’s Maximum Demand charge for May 2021 given that industries have already been on a reduced workforce of 60% from May 25 2021 and the period of lockdown just announced which could possibly be from June to July 2021;
  • Energy discounts for industries not able to operate and continue with the electricity rebate for the next six months from July to December 2021;
  • Suspension of Gas Malaysia’s Take or Pay (TOP) in gas off-take agreement for May 2021 given that industries have already been on a reduced capacity of 60% from May 25, 2021 and the period of lockdown just announced which could possibly be from June to July 2021;
  • At least allow manufacturing industries with contractual export orders to operate at 50% capacity during Phase 2 of lockdown even if they are not in the essential economic sectors and not allowed to operate in Phase 1 (June 1-14, 2021);
  • Permit the movement of all containerised and sealed import and export cargo to and from ports and airports and manufacturing warehouses. Failure to allow companies to clear import shipments from ports and export shipments from factory warehouses to meet shipment deadlines will lead to port and airport congestion similar to MCO 1.0; and
  • Allow industries to undertake maintenance of plant during this period with 20% workforce capacity instead of only 10% which is not practical to carry out warm idle activities for 24/7 operation companies.