MCO 3.0: Can I have Another Relief Package Please?

Under MCO 1.0, there were many possibilities of securing some relief for my business. But, lo and behold, my application was too late for the fund – “kuota sudah habis”. As a SME (bordering on a Micro), it is a struggle to survive for more than a year under Covid-19. The only good point was that there was a loan moratorium for a while.

We are now in MCO 3.0 with a full lockdown to be implemented tomorrow. What relief is possible?

On official count, the Government has rolled out seven economic stabilisation, stimulus and recovery packages. Some say it totalled RM340 billion or 24% of GDP. But fiscal injection was only RM72.6 billion (to March 2021).

 

Source:www.kualalumpurpost.net

GDP recovered somewhat from negative 17% in Q2 2020 to a lower decline of 0.5% in Q1 2021. Businesses at 40-50% of capacity at best were looking forward to a higher tempo with the vaccine roll-out. But alas, the roll-out is so slow, it may take at least one year to reach “herd” immunity.

Under MCO 3.0 and dine-in banned, restaurants, retail outlets lost 70-80% of the pre-pandemic revenue. Others are further behind – especially hotel and airline sectors. In all probability, MCO 3.0 or a full lockdown will be extended to mid -July. Then more SMEs will fold-up. SME Association expects 40% of SMEs to close operations. Even if it is a new version of MCO 1.0, we will have more bankruptcies as well.

In the current lockdown phase the economy will lose RM 2.4 billion per day or about RM 72 billion if it is for a month.

So, what do SMEs want?

We need cash relief for wages, rental relief, loan relief or another loan moratorium. Small/micro businesses, the self-employed and those paid on daily or weekly wages should be given relief because they are the most impacted by the restriction on movement.

Is that too much to ask when this is not our doing? And the pandemic is not going away soon, even with the vaccine rollout at full steam. SMEs will need 12-18 months to get back on their feet after it is finally over. Meanwhile, how will one sustain monthly wages, rental or interest on loans – key components of total expenses? This idea of cutting OPR is optical, why bother with interest cost when we are dead!

Remember Makcik Kiah?

Makcik Kiah sells (or used to sell) banana fritters (pisang goreng) as our PM claims. She lives in a Government housing project. Her husband, a Government pensioner, earns extra income as a Grab driver. Their daughter depends on PTPTN for her studies while their unmarried son lives with them.

She is livid! No savings, no money to pay rent, no customers and no funds to settle loans or utilities. She is in deeper debt and no idea where help will come from. Mr. PM can you see her after taking a 50% wage cut?