KUALA LUMPUR, June 1 — The Pakatan Harapan presidential council has urged the Perikatan Nasional government to use a cash injection of RM45 billion in order to adequately deal with the economic fallout resulting from movement control order (MCO) 3.0.
In a statement by PKR president Datuk Seri Anwar Ibrahim, Parti Amanah president Mohamad Sabu, and DAP secretary-general Lim Guan Eng, the council said Putrajaya needs to be bolder in its spending to pull the economy out of recession.
“Pakatan Harapan is disappointed that the RM40 billion Pemerkasa Plus economic stimulus package announced by Prime Minister Muhyiddin Yassin contains only RM5 billion in new funding and not the RM45 billion cash injection that is required by the economy.
“The whole-of-government’s failure to contain Covid-19 has led to Malaysia’s record number of cases and deaths. RM5 billion cash injection is hardly adequate when MCO 3.0 is expected to sustain losses of RM2.4 billion daily, similar to MCO 1.0.” it said.
Under the current MCO, Pakatan estimated the economic losses will amount to a minimum of RM60 billion, thereby necessitating a RM45 billion cash injection into the economy to mitigate these minimal economic losses.
“The prime minister also continues with the old economic and welfare orthodoxy of giving one-off payments, when what is needed in a global pandemic is serial financial aid on a regular basis to save jobs, businesses, and economic livelihood.
“Financial assistance should not be limited to B40 but also the M40 group to prevent them from slipping down into the B40 group,” it said.
The council proposed several ways of utilising the RM45 billion cash injection into the economy to directly benefit workers and business, starting with an increase in monthly welfare payments to RM1,000.
“These payments, which include the unemployed, will cost RM7 billion for the remaining seven months of the year till the completion of the National Covid-19 Immunisation Programme (PICK) by December 31 when a herd immunity of at least 80 per cent.
“Secondly there needs to be an automatic extension of the moratorium of bank loan repayments, excluding the T20 category, until PICK is completed by the end of the year. This will help eight million Malaysian individuals and companies,” it said.
The cost of the moratorium should be borne by the banking industry, as Pakatan argued it recorded a healthy profit after tax of nearly RM23 billion for 2020.
“Thirdly, work hiring incentives should be implemented 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, which will generate employment for 300,000 Malaysian workers costing RM6.5 billion per annum.
“Fourthly, RM3.5 billion should be allocated to the Health Ministry to swiftly and smoothly ramp up PICK, to accelerate testing, tracing and treatment, to upgrade hospital capacity and capability as well as medical equipment and human resources in order to avert the collapse of our public healthcare system,” it said.
Lastly, the council said RM28 billion is needed in the form of financial grants which include wage, rental and utility subsidies, loan guarantees and credit extensions for small and medium enterprises, construction, retail, and the crippled tourism industry.
It estimated that tourism lost RM100 billion in revenue last year, and without life-support from the government it faces a bleak future.
“This preliminary RM45 billion financial aid package for a total lockdown MCO 3.0 is not huge when compared to RM340 billion spent under MCO 1.0 and MCO 2.0.
“This RM45 billion financial aid package is needed to encourage a whole-of-society approach to not only overcome Covid-19, but also to soften the adverse economic impact of a total lockdown and avert a deepening economic recession,” said the council.
Yesterday Prime Minister Tan Sri Muhyiddin Yassin announced a RM40 billion financial aid package, as part of Putrajaya’s initiative to assist the rakyat and to handle the effects of the two week full-scale lockdown which begins today until June 14.