Why are SMEs expressing dissatisfaction with current support packages?

Question

Accepted Answer

SMEs Express Dissatisfaction with Current Support Packages Due to Inadequacy of Wage Subsidies and Limited Attention to Vulnerable Groups

Small and Medium Enterprises (SMEs) are voicing significant dissatisfaction with the current support packages, primarily due to the perceived inadequacy of the wage subsidy and the limited attention directed towards highly vulnerable low-income self-employed individuals. While the government's Prihatin package aims to provide relief through emergency cash injections and deferred payments, these measures are seen as insufficient to address the widespread economic fallout from the COVID-19 pandemic. The existing Employment Retention Programme (ERP), for instance, offers a flat RM600 subsidy per worker, which is considerably lower than support provided in countries like the United Kingdom, where the government covers 80% of wages up to a certain limit.
Insufficient Wage Subsidy Amounts Compared to International Standards

The current wage subsidy provided under Malaysia's Employment Retention Programme (ERP) offers a flat rate of RM600 per worker. This amount represents approximately 30% of a RM2,000 salary and only 15% of a RM4,000 salary. Such figures are notably less generous when compared to international counterparts. For example, the United Kingdom's scheme subsidises 80% of wages, up to a maximum of £2,500 (approximately RM13,347) per employee, demonstrating a significantly higher level of financial support aimed at retaining employment during the crisis.
Eligibility Criteria Exclude Businesses with Recent Downturns

The Employment Retention Programme (ERP) imposes strict eligibility criteria, requiring companies to demonstrate a loss of income of 50% or more since January. This condition inadvertently excludes many businesses that have experienced significant financial downturns more recently, despite the economic impact of the pandemic. In contrast, New Zealand's wage subsidy scheme allows eligibility for companies that have lost 30% of their income due to COVID-19, indicating a more flexible and inclusive approach to supporting businesses facing economic hardship.
Neglect of Low-Income Self-Employed Individuals

A significant point of dissatisfaction among SMEs and observers is the scarce attention given to highly vulnerable low-income self-employed individuals. These individuals often operate with fewer financial reserves and may not fall neatly into existing support structures designed for traditional employment. The current packages appear to overlook the specific challenges and precarious situations faced by this segment of the workforce, leaving them without adequate recourse during the economic downturn.

Reading history

Hide →

This history is cleared when the page is closed.

Why are SMEs expressing dissatisfaction with current support packages?

Loading

Was this article helpful?

Helpful

Not helpful

Report an issue

1

0

0

Share with friends