More direct cash transfers and wage subsidies needed to assist vulnerable and protect jobs — Kabinet Rakyat

MARCH 26 — Kabinet Rakyat calls on the government to provide larger direct cash transfers worth at least RM1,000 per month to all B40 households, and 25-50 per cent wage subsidies relative to total wages for SME employees earning up to RM 5,600 monthly (roughly 200 per cent of national median salaries) during the April-June 2020 period.

The large cash transfer programme will protect irregular job holders and those in the informal sectors unable to work due to the Movement Restriction Order (MRO), while the wage subsidy will lessen the temptation for SME companies to lay off its workers.

Urgent action must be taken to address the ongoing health and economic crisis. According to a Malaysian Institute of Economic Research (MIER) study, Malaysia’s real GDP may shrink by 2.9 per cent this year, with 2.4 million people losing their jobs. Massive job loss will exert prolonged adverse effects on the economy, as well as the social stability of the country, long after the health crisis is over.

Current measures are inadequate

The government has already announced some measures to cushion the impact of COVID-19 and the MCO. This includes cash transfer policies like the Employment Retention Program (ERP) providing RM 600/month up to six months for employees forced to take unpaid leave and a one-off additional RM 150 in Bantuan Sara Hidup (BSH). Meanwhile, Bank Negara Malaysia has introduced a massive monetary stimulus in the form of loan moratorium to address cash flow issues among companies, that hopefully will lessen the need for layoffs.

While these measures are welcomed, they are still inadequate.

The need for cash transfers is clear. Groups working directly with low-income communities have been overwhelmed by requests for cash assistance since the start of the movement control order (MCO).

Furthermore KRI, IDEAS, ISIS Malaysia dan REFSA as well as individuals including Nungsari Ahmad Radhi, Hamdan Abdul Majeed, and Muhammed Abdul Khalid have all argued that the cash transfer measures introduced so far (the ERP and the small increase in BSH) are insufficient. They all recommend additional cash transfers in some forms, by expanding coverage or increasing the amount of ERP or BSH, or both.

Other countries and jurisdictions have also responded to the crisis with substantial direct cash transfers. Hong Kong, Singapore, and Australia for example, have already done so. Concurrently, Denmark and the United Kingdom have introduced massive wage subsidies to protect jobs.

Our response to this crisis must include and prioritise those hit the hardest.

*This statement is submitted by Tharma Pillai, Yu Ren Chung and Hafiz Noor Shams on behalf of the ‘Kabinet Rakyatof Projek Wawasan Rakyat, a civil society movement focused on principles-based activism, genuine democratisation, and national unity.

**This is the personal opinion of the writer and does not necessarily represent the views of Malay Mail.

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