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FMM asks govt to consider relaxing some measures in PRIHATIN package

FMM In the News: ASTRO AWANI, KUALA LUMPUR, Monday, 30 March 2020: The Federation of Malaysian Manufacturers (FMM) has expressed hope that the government would consider relaxing some measures in the Prihatin Rakyat Economic Stimulus Package (PRIHATIN).

The federation also hopes that the government would consider some new proposals for urgent consideration to help ease the immediate cash flow and financial constraints of businesses, in particular the small and medium enterprises (SMEs) due to COVID-19 and the Movement Control Order (MCO).

For the RM50 billion Danajamin Nasional Bhd's guarantee scheme, FMM hopes that banks will fully assist affected companies with reasonable interest charges and focus on saving the financially distressed companies from folding with easier complied conditions since the government has already provided guarantee and with low interest.

FMM also appeals for Bank Negara Malaysia's (BNM) further intervention to ensure that there is consistency across all financial institutions in the treatment of interest during the moratorium period.

"FMM is of the view that banks should not compound interest but rather waive or reduce the interest during the moratorium period to further assist companies affected," it said in a statement today.

Prime Minister Tan Sri Muhyiddin Yassin, on March 27, unveiled the PRIHATIN package worth RM250 billion to protect the welfare of the people and support businesses, including SMEs.

Under the RM5 billion Special Relief Facility for SMEs, while it would certainly allow more affected SMEs to tap into the fund, FMM said given the large number of SME establishments in the country, it hopes that the interest could be further reduced to 2.0 per cent and lending conditions be lessened, including the strict collateral requirement.

FMM also suggests that the allocation of RM5.9 billion under the Wage Subsidy Programme should be doubled to RM12 billion as the allocated amount is not sufficient since it is estimated to only cover 3.3 million workers.

"The RM600 wage subsidy introduced should have been extended to all employees regardless of wage level and the subsidy should be automatic without the need for companies to prove reduction in earnings by 50 per cent as all companies would be experiencing a significant reduction in revenue and sales as the result of COVID-19 and the MCO," it said.

FMM also proposes that there should be a complete exemption or a reduction in the employer contribution to the Employees Provident Fund until end of December 2020 instead of the current announced deferment/ restructuring/ rescheduling option of payment.

"The current initiative of deferment would still tie employers down financially as they focus on their respective business revival plans to ensure business viability and continuity and keeping jobs in the next six months to a year," it said.

FMM proposes that the government introduce a special soft loan scheme of RM5 billion with a low 2.0 interest rate for companies to cover the fixed capital payments such as rents and utilities, as well as administrative payments, including salaries during this period.

"The government is strongly urged to introduce the Certificate of Force Majeure similar to the facility instituted by China's authorities to assist exporters that are unable to meet contractual obligations due to delays in resuming manufacturing activities following the implementation of the MCO," it added.


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