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Malaysia's RM340bn PEMERKASA+ package: Extended wage subsidies, and more

Malaysia's RM340bn PEMERKASA+ package: Extended wage subsidies, and more

With the lockdown possibly increasing the risk of job losses and reduced income, SOCSO's Wage Subsidy programme will be extended for a month. It is expected to benefit 200,000 employers and 2.5mn employees. 

Malaysia's Prime Minister Tan Sri Muhyiddin Yassin has announced a new assistance package to tide the nation through the ongoing pandemic.

Known as PEMERKASA+, the package, revealed on Monday ( 31 May 2021), covers three main goals:

  • #1 Enhancing public health capacity;

  • #2 Continuing the Prihatin Rakyat agenda

  • #3 Supporting business continuity

In working towards these goals, the package includes assistance such as a one-month extension on the Wage Subsidy Programme, an additional allocation of RM2.1bn to the Bantuan Prihatin Rakyat package, increased payment under the Special Prihatin Grant for SMEs, and more, as shared below.

Goal #1 Enhancing public health capacity

The Government has agreed allocate an additional RM1bn to increase capacity and strengthen public health. It will be used for the following:

  • An allocation of RM450mn to increase the capacity of beds and ICU equipment for COVID-19 treatment, not only in MOH-supervised hospitals, but also in Public University Teaching Hospitals such as UiTM, UPM and UKM and through ATM field hospitals such as in Sabah and Sarawak. Outsourcing will also be implemented for private hospitals. This amount includesRM200mn announced by the Minister of Finance on 22 May.
  • RM550mn to cover expenses related to COVID-19 for various agencies, including increased operating and management costs in dealing with the health crisis, covering medicines, reagents for screening, and appointment of officers on a contract basis. This will also cover the cost of operating the COVID-19 Quarantine and Treatment Centre at MAEPS and at the state level.
  • Extending the service period of more than 14,000 existing contract medical officers and nurses until 2022. In addition, the government will also re-appoint more than 500 health workers who will retire compulsorily this year on a contract basis.

Goal #2 Continuing the Prihatin Rakyat agenda

PM Muhyiddin said: "For the second goal, the Government will continue to prioritise the Prihatin Rakyat agenda. This is mainly to ensure the well-being and survival of the vulnerable and workers who depend on daily wages can continue to be assisted. Undoubtedly, they are among the most affected following the enforcement of the PKP." 

In this regard, the Government has allocated  RM2.1bn in efforts to increase the rate of the Bantuan Prihatin Rakyat (ACA) programme. Households earning below RM2,500 will receive an additional ACA rate of RM500 and households earning between RM2,501 to RM5,000 will receive a rate of RM300. Singles will receive RM100.

This additional ACA will be credited to the recipient's account at the end of June, and follows the last payment phase of the ACA in September 2020.

Next, following discussions with Bank Negara Malaysia (BNM), the banking industry has given full assurance and commitment to continue to provide loan repayment assistance and moratorium, the PM stated. Therefore, all B40 groups and people affected by job loss, as well as micro-enterprises and SMEs that are not allowed to operate during the PKP period, will be given the option to obtain a moratorium approval automatically for three months. Otherwise, the can choose to get a reduction in repayment in installments of 50% for a period of six months.

This initiative will be implemented immediately in June, and is expected to benefit more than five million borrowers, with a value of up to RM30bn.

PM Muhyiddin added that the banking industry will provide more detailed information on this matter from 1 June.

Apart from the above, the Government will also launch the Bus and Taxi Hire Purchase Rehabilitation Scheme this week, with an allocation of RM1bn. Through this scheme, eligible bus and taxi operators can get a loan moratorium of up to 12 months and extend the loan period for up to 36 months.

The PM said: "I recommend that Government agencies and companies offer deferred loan repayments as well as rental discounts for business premises. MARA will continue the MARA PRIHATIN Peace of Mind programme which is open until 31 July 2021. Borrowers can apply online to reschedule student loan repayments or moratoriums."

For MARA entrepreneurs affected by the economic downturn, a 30% discount on the rental of business premises will be given for the month of May to July 2021.

Next, the PM noted that "undoubtedly, the implementation of PKP 3.0 will affect a large number of people, especially the risk of job loss and reduced income due to the closure of most sectors of the economy."

In light of this, the Government has agreed to extend the Wage Subsidy Programme under SOCSO for one month, for all affected economic sectors, at a cost of RM1.5bn. There will be a limit of 500 employees per application, borne by the Government. This is expected to benefit 2.5 million employees and more than 200,000 employers.

Lastly, employers registered with HRDCorp will be given a levy payment exemption for one month in June 2021. At the same time, employees can also improve their knowledge and skills through the free e-LATiH learning portal involving over 400 modules and skills courses, the PM stated.

Goal #3 Supporting business continuity 

Through this goal, the Government will continue providing assistance to ensure the viability of businesses, especially to SMEs in managing their cash flow. In this regard, PM Muhyiddin announced that the Special Prihatin Grant rate will be increased by RM500, to RM1,500. This means that almost one million SMEs and micro enterprises will receive RM1,000 in mid-June, and another RM500 will be disbursed in July.

He added: "I would also like to emphasise that, based on the latest SOPs announced, the Government still allows the sale and purchase operations of small traders, street hawkers and including micro enterprises. Therefore, if traders want to obtain micro credit financing as working capital, a total of RM1.5bn is provided for the whole year by BSN, TEKUN, MARA, SME Corp. and YAPEIM with a financing rate as low as 3%."

In addition, to assist in cash flow of companies and SMEs, banking institutions will continue to offer financing and loan facilities. Banking institution funds have been further strengthened through various BNM-financed SME soft loan facilities with the remaining RM5bn.

To further support SMEs, BNM will add RM2bn of Targeted Assistance and Rehabilitation Facilities for affected SMEs. Thus, the total loan funds for SMEs with loan rates as low as 3.5% still available, will be RM7bn.

Additionally, to reduce the burden of the PKP measures on taxi drivers, rental car drivers and school bus drivers, the Government will provide a one-off Special Assistance of RM500 to 17,000 tour guides, 40,000 taxi drivers, 11,000 school bus drivers, 4,000 sightseeing buses and 62,000 rental car and e-hailing drivers. This assistance, amounting to RM68mn, will be channeled to registered recipients in July.

Apart from the above, to reduce the burden on businesses, the Inland Revenue Board will consider appeals for the imposition of penalties and defer payment of penalties to 2022, as well as provide rescheduling of outstanding tax payments, for taxpayers and affected businesses.

The Companies Commission of Malaysia also agreed to reintroduce extensions for the submission of financial statements, the implementation of annual meetings for public companies listed on Bursa Malaysia, and a moratorium on fines for late submission of statutory documents. It will also waive late fees for renewing business licenses until 31 December 2021, for micro SMEs as well as sole proprietorship and partnership businesses.

Next, the Interim Measures to Reduce the Impact of Disease Act COVID-19 or Act 829 will be improved to assist affected individuals and businesses. Coverage related to inability to perform contractual obligations will be extended with effect from 31 December 2021. In this regard, the Government will provide free mediation services through the COVID Mediation Centre, to all individuals or businesses regardless of background.

Further measures include:

  • The Government will extend electricity bill discounts to the affected sectors. Accordingly, hotel operators, travel and tourism agencies, shopping premises and complexes, convention centres, theme parks and local airline offices are eligible to receive a 10% electricity bill discount for an additional three months between July to September 2021.
  • The Government has also agreed to give special deductions to owners of buildings and business spaces who offer a reduction in the rent of business premises to SMEs and non-SMEs for another six months until 31 December 2021, for a reduction in rent of at least 30% of the current rental rate. The extension until 31 December 2021 for tourism tax and service tax exemption on accommodation provided by hotel operators is still ongoing.
  • An extension on the HOC stamp duty exemption until 31 December 2021.
  • An extended sales tax exemption on imported CKD and CBU passenger vehicles previously announced under the Prihatin initiative from 1 July 2021 to 31 December 2021. 

Read the full announcement here

Photo / National Security Council's Facebook page

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