Knowledge Highlights 8 July 2021
On 28 June 2021, the Prime Minister of Malaysia announced Malaysia’s seventh economic stimulus package to-date - the Perlindungan Rakyat dan Pemulihan Ekonomi (meaning “Protection of the People and Recovery of the Economy”) (“PEMULIH”) assistance package - with the aim of continuing the “prihatin rakyat” (public welfare) agenda, supporting business continuity and increasing vaccinations following the extension of the first phase of the National Recovery Plan (“NRP”) announced on 15 June 2021. The NRP, which comprises four phases, is based on three indicators, namely, the number of daily COVID-19 cases, the rate of bed usage in ICU wards and the percentage of the population that has completed two doses of the vaccine. The PEMULIH assistance package is intended to provide aid to the public. The PEMULIH assistance package is worth MYR150 billion, and covers a total of 35 initiatives.
We have set out briefly below a summary of the 35 initiatives.
First objective: Continuing the prihatin rakyat agenda
1. Providing direct financial aid:
The Malaysian Government will provide direct financial aid to the public in the total amount of MYR10 billion through the Bantuan Prihatin Rakyat assistance, Bantuan Khas COVID-19 assistance, and the Bantuan Kehilangan Pendapatan assistance.
- Bantuan Prihatin Rakyat
In the past announcement of the PEMERKASA Plus assistance package, the Malaysian Government has agreed to provide an additional payment under Bantuan Prihatin Rakyat of up to MYR500 in July, with payments staggered from 29 June. These payments will be made to, among others, households earning less than MYR5,000 per month.
The overall value of Bantuan Prihatin Rakyat to year-end is MYR4.9 billion.
- Bantuan Khas COVID-19
MYR500, MYR 500 and MYR300 will be given to hardcore poor households in August, November and December respectively. Meanwhile, MYR200 and MYR300 will be given to single individuals in the hardcore poor group in August and November respectively.
B40 households will be given MYR500 and MYR300 in August and December respectively while single individuals in the B40 group will be given MYR200 in August.
MYR250 and MYR100 will be given to M40 households and single individuals in the M40 group respectively in August.
- Bantuan Kehilangan Pendapatan
MYR500 will be given to those that have lost their jobs based on data held by the Employees Provident Fund (“EPF”) and the Social Security Organisation (“SOCSO”).
2. Providing aid for graduates:
Non-contributors to the SOCSO such as fresh graduates, school leavers and workers in informal sectors may register under the MYFutureJobs platform to receive an allowance of at least MYR300.
The Malaysian Government will also allocate MYR125 million through the Human Resource Development Corporation (“HRD Corp”) to implement the “Place and Train” initiative under the Janapreneur programme.
3. Providing food baskets
The Malaysian Government will allocate MYR300,000 for each member of Parliament to provide food basket assistance to those affected in their respective constituencies. A total of MYR10 million will also be allocated for food basket assistance specifically for indigenous communities.
4. Controlling prices of essential items
The Malaysian Government will continue to maintain the retail prices of essential commodities such as RON95 petrol, diesel and LPG. The Malaysian Government will also implement a price control programme based on the Crude Palm Oil threshold to ensure that the price of a 5kg bottle of cooking oil does not exceed MYR30 a bottle.
5. Enhancing psychosocial support
The Malaysian Government will enhance psychosocial support through channels such as talian kasih helplines and allocate MYR15 million to non-governmental organisations to help deal with social issues such as mental health, homelessness and other social problems at the community level.
6. Continuing electricity bill discounts
A special discount of 5% to 40% on electricity bills will be provided based on electricity usage capped at 900 kWh a month. For example, a discount of 40% will be provided for electricity usage below 200 kWh a month and a discount of 15% will be provided for electricity usage of 201kWh to 300 kWh a month. This special discount will come into effect for a period of three months starting with bills dated July 2021.
The special discount of 10% on electricity bills provided to six business sectors, namely, hotel operators, theme parks, convention centres, shopping malls, local airline offices, as well as travel and tour agencies will be extended for a further three months, for electricity bills dated October to December 2021.
7. Extending the provision of free internet access
The provision of free one Gigabyte data by the telecommunications industry will be provided to the public until the end of December 2021.
8. Providing mobile banks
To ease access to banking services, the Malaysian Government will allocate MYR18 million for domestic banks to set up 30 mobile banks in Peninsular Malaysia, Sabah and Sarawak.
Second objective: Supporting business continuity
9. Continuing the Prihatin Special Grant
The Malaysian Government is expanding the Prihatin Special Grant assistance in which an additional payment of MYR500 will be made to micro small and medium enterprises (“micro-SMEs”) in the months of September and November 2021. This payment is in addition to the Prihatin Special Grant (“GKP”) 3.0 payment of MYR1,000 and MYR500 made under the PEMERKASA Plus assistance package.
10. Improving the wage subsidy program
In order to support business continuity, the Wage Subsidy Programme 4.0 will be implemented. Eligible employers will receive a wage subsidy of MYR600 for each of their employees up to a limit of 500 employees. Employers may also apply for the programme for employees that earn more than MYR4,000 as, compared to the position under the PERMAI assistance package, the wage subsidy is no longer subject to the condition that employees must be earning less than MYR4,000.
This initiative involves an additional allocation of MYR3.8 billion.
11. Exempting employers from payment of levy
Employers that are unable to operate during the Movement Control Order (“MCO”) will be automatically exempted from payment of levy to the HRD Corp for a period of two months. Employers in new sectors that are covered pursuant to the amendment to the Perbadanan Sumber Manusia Berhad Act 2001 will be exempted from payment of levy until 31 December 2021.
12. Encouraging the creation of jobs
The Malaysian Government will extend the PenjanaKerjaya programme implemented by SOCSO, due to expire in end June, which provides financial incentives to employers for the creation of jobs. The programme, which will be rebranded as PenjanaKerjaya 3.0, will include a few enhancements such as lowering the salary limit from MYR1,500 to MYR1,200 to encourage the replacement of foreign workers with local workers.
13. Supporting and boosting online businesses
The Malaysian Government will allocate MYR200 million and MYR100 million for SMEs and micro-SMEs respectively to support digitalisation of businesses and encourage cashless transactions. Initiatives include the addition of MYR100 million to the SME Digitalisation Grant, enabling SMEs to obtain a matching grant of up to MYR5,000 for the purchase or subscription of digital platforms.
14. Supporting the creative sector
The Malaysian Government will allocate MYR100 million in funding facilities and financial aid to address the plight of players in the creative sector that are unable to carry out activities during the MCO.
15. Providing special financial assistance to childcare centre operators
For childcare centres or nursery operators, a special financial assistance of MYR3,000 will be provided.
16. Providing special financial assistance to registered school canteen operators
For registered school canteen operators, a special financial assistance of MYR1,000 will be provided.
17. Providing one-off financial assistance to sports facilities’ operators
For sports facilities’ operators, a one-off financial assistance of MYR3,000 will be provided.
18. Providing special financial assistance to the unemployed and disabled
A special financial assistance of MYR500 per month for a period of three months will be provided to disabled persons who have lost their jobs or who are unemployed.
19. Providing business capital for the disabled and homeless
The Malaysian Government will implement a programme aimed to provide business capital and guidance to disabled and homeless persons in businesses.
20. Easing government procurement procedures
The Malaysian Government will ease the procedures relating to government procurement by measures such as allowing variation of price for projects due to significant increase in construction materials costs until 31 December 2021, assisting local G1 to G4 contractors to implement small-scale projects and allowing extension of time or extension of contract period for services and goods contracts that are affected by the implementation of the MCO, subject to contract clauses.
21. Allowing postponement and rescheduling of MARA loan repayments
The Malaysian Government will allow Majlis Amanah Rakyat (“MARA”) entrepreneurs affected by COVID-19 to apply for postponement of MARA loan repayments for a period of three months or a rescheduling of repayments by extending the funding period to 36 months.
22. Extending discount on MARA premises rental
MARA will extend the 30% discount on MARA premises rental for a further five months, i.e. until December 2021.
A special tax deduction will also be provided to those that provide a minimum 30% reduction on rental of business premises to businesses until 31 December 2021.
23. Enhancing funding and guarantees to support SMEs
To support SMEs, the Malaysian Government will increase the government guarantee scheme limit under Syarikat Jaminan Pembiayaan Perniagaan Bhd (SJPP) to MYR20 billion.
Bank Negara Malaysia (“BNM”) will also allocate an additional MYR2 billion in its fund to provide SMEs with access to financial assistance.
24. Extending microcredit schemes
To support micro-enterprises, the Malaysian Government will extend the microcredit schemes announced previously with an addition of MYR1.1 billion in funds.
25. Supporting cooperative institutions
To support cooperative institutions, the Malaysian Government will allocate MYR20 million for the Cooperative Economic Recovery Intervention Financing programme. This programme allows entrepreneurs to carry out economic activities through cooperatives, including marketing products through online platforms and encouraging the purchase of goods from cooperative shops.
26. Providing support to the tourism sector
For registered tour agencies, a one-off financial assistance of MYR3,000 will be provided.
The Malaysian Government will also postpone the monthly income tax instalments for companies and exempt hotel operators from tourism and service taxes until the end of the year.
27. Introducing the EPF i-Citra programme
EPF members whose incomes have been affected by COVID-19 may make withdrawals of MYR1,000 a month for a period of five months. Members may apply for this facility through the online i-Citra portal available at http://icitra.kwsp.gov.my from 15 July 2021, with the first payment expected to be credited in members’ accounts in August 2021.
28. Allowing targeted moratorium and deferment of educational loan repayments
The Malaysian Government will give Perbadanan Tabung Pendidikan Tinggi Nasional (“PTPTN”) borrowers a targeted moratorium for a period of three months. The Malaysian Government will also allow the deferment of repayments of Jabatan Perkhidmatan Awam (“JPA”) loans and compensation claims under federal scholarships for a period of six months.
MARA borrowers may apply to postpone the repayment of education loan facilities for a period of three months or reschedule such repayments with monthly instalments of MYR100 for a period of 12 months. Borrowers may also apply to postpone the repayment of Skills Development Fund Corporation loans for a period of three months.
29. Allowing the deferment of insurance premiums
Insurance and takaful policy holders may apply for deferment of insurance premium and takaful contribution payments to 31 December 2021.
30. Continuing the loan moratorium for individual borrowers and micro-entrepreneurs
The Prime Minister announced that all individual borrowers and micro-entrepreneurs will be eligible to apply for an automatic six-month moratorium on bank loans.
Third objective: Increasing vaccinations
31. Increasing the nation’s supply of vaccines
The Malaysian Government has allocated MYR400 million to increase the nation’s supply of vaccines. This increase in supply is partly intended to be used to commence the vaccination of 6.4 million teenagers between the ages of 12 to 18 years old.
32. Increasing the number of vaccination centres
To increase the daily vaccination rate, the Malaysian Government will allocate MYR200 million to open 29 new vaccination centres, upgrade existing centres, implement drive-through vaccination centres, mobile vaccination centres and carry out outreach home-to-home vaccination programmes.
33. Increasing allowances of frontliners and volunteers
The Malaysian Government had announced earlier that the consolation payment for health volunteers that have worked for more than 12 hours a day would be increased from MYR50 to MYR100 a day. This consolation payment will also include those that are assigned to quarantine centres. Further, the Malaysian Government will increase the allowances of frontliners involved in the National COVID-19 Immunisation Programme from MYR200 to MYR600 for a period of six months from July 2021. Both initiatives will involve an additional allocation of MYR200 million.
34. Encouraging participation of the private sector in increasing vaccinations
The Malaysian Government will allocate MYR150 million to encourage participation of the private sector to use their premises as vaccination centres and implement immunisation programmes for workers. Initiatives include allowing employers registered under HRD Corp to use up to 10% of the current remaining levy for the costs of managing and purchasing COVID-19 vaccines and providing tax relief for expenses relating to setting up premises as vaccination centres.
The Malaysian Government is also considering allowing companies to operate at full capacity once their employees have completed two doses of vaccine injections.
35. Easing the vaccination process for vulnerable groups
To ensure that vulnerable groups are not excluded from obtaining vaccinations, the Malaysian Government will also provide a MYR30 subsidy for taxi and e-hailing rides used by the disabled and the elderly for commuting to vaccination centres on their vaccination appointment dates.