‘Industries urgently need financial aid to survive’

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FMM maintains that a total lockdown is going to have a devastating acute impact on business survival and employment given that many companies, especially SMEs, are barely on their road to recovery from the impact of the pandemic. — Bernama photo

KUCHING: The Federation of Malaysian Manufacturers (FMM) has called on the federal government to provide assistance financial packages for the public and economic sectors following the decision to implement a total lockdown starting with Phase 1 with full closure of the social and economic sectors (except for essential economic and service sector) from June 1, 2021 to June 14, 2021.

According to FMM president Tan Sri Soh Thian Lai, FMM has been consistent in not favouring a total lockdown due to the irreparable damage to the economy and livelihood.

“In this regard, FMM acknowledges that the government has always maintained a balance between protecting lives and livelihood all this while but unfortunately, the alarming spike in the number of the Covid-19 infection cases this week had led to the decision to institute a total lockdown,” he said in a statement.

“FMM maintains that a total lockdown is going to have a devastating acute impact on business survival and employment given that many companies, especially SMEs, are barely on their road to recovery from the impact of the pandemic.

“If businesses are unassisted by the government, this lockdown could lead to their closure and significant job losses where the numbers could hit one million or more.”

In this regard, FMM was heartened to note that the Ministry of Finance will work on an assistance package for the affected rakyat and economic sectors.

The federation reiterated that the government must urgently support industries during this crucial period with the necessary financial assistances and initiatives including allocating a Special relief fund to assist companies, especially the SMEs.

“We are asking for an automatic bank loan moratorium for at least three months or more effective from June 1, 2021.

“We also call on the government to reinstate the Wage Subsidy Programme (WSP) for all industries for the phases of the lockdown period with RM800–RM1,000 per employee.

“The government should suspend or extend the payment date for all statutory contributions given that operations would be in total lockdown except for the allowable essential economic and services sectors,” Soh added.

Another form of ais can be the waiver of Tenaga Nasional Bhd’s maximum demand charge for May 2021, given that industries have already been on a reduced workforce of 60 per cent from May 25, 2021 and the period of lockdown just announced which could possibly be from June to July 2021.

They can also continue with the electricity rebate for the next six months from July to December 2021, FMM said.

As industries Urgently need financial assistance to survive devastating impact of total lockdown, FMM proposed to suspend Gas Malaysia’s Take or Pay (TOP) in gas off-take agreement for May 2021 given that industries have already been on a reduced capacity of 60 per cent from May 25, 2021 and the period of lockdown just announced which could possibly be from June to July 2021.

“They should consider allowing manufacturing industries with contractual export orders to operate at 50 per cent capacity even if they are not in the essential economic sectors,” Soh continued.

“Also, all import and export activities should continue including ports, warehousing and all goods transport activities.

“Industries should be allowed to undertake maintenance of plant as well as those with furnaces and kilns that need to continue running on a 24/7 basis and cannot be shutdown to operate with 20 per cent workforce capacity.”

In addition, FMM called on the government to further extend the effective period of the Temporary Measures for Reducing the Impact of COVID-19 Act 2020 on the inability to perform contractual obligations to beyond June 30, 2021 and expand the Act to provide provision for relief for manufacturing and other manufacturing related services such as trading or distributorship and logistics which are currently not included.