THE Malaysian Trades Union Congress (MTUC) has proposed that a RM10 billion revolving fund for low-wage earners be included in Putrajaya’s stimulus package to mitigate the Covid-19 outbreak’s effects on the economy.

Secretary-general J. Solomon said workers in the B40 and M40 groups were rarely included in previous stimulus packages, which catered more to bigger players like small and medium enterprises and conglomerates.

“The revolving fund (can) offer loans of up to RM20,000, at a special interest rate of 2.5% annually, to workers. The quantum of the loan can be based on the applicant’s salary.

“Repayments can be done through mandatory salary deductions if the government is worried that borrowers will default on repayments,” he said in a statement today.

The government will announce its stimulus package next Thursday amid the outbreak that started in the Chinese city of Wuhan last December. The disease has killed more than 2,000 people on the mainland and spread to dozens of countries.

Covid-19 has caused China’s position as a key market and producer to have negative roll-on effects on other economies, including Malaysia.

Solomon said B40 and M40 workers bear the brunt of the outbreak’s impact through job and pay cuts, as employers are expected to reduce costs, including slashing bonuses, and freeze overtime.

“Already, the Malaysian Employers’ Federation has warned that up to 100,000 workers risk being laid off if the Covid-19 outbreak persists until year-end.

“All these drastic cost-cutting measures by employers will mean job losses or workers facing further cuts in their take-home pay, at a time when they are already grappling with low salaries and a spike in the cost of living.”

He said MTUC has observed that while employers and companies benefit from the government’s economic aid and incentives, “little of that, if any, trickles down to the workers who have kept the economy ticking, in good times and bad”.

“All in all, the government must recognise that the Covid-19 outbreak will likely lead to workers getting smaller pay packets or even losing their jobs, pushing them further into financial turmoil. This will result in workers facing more hardship in servicing their monthly housing, car and personal loan repayments, apart from household expenses.”

He suggested that Putrajaya sources money for the revolving fund from “blue-chip GLCs (government-linked companies) and banks”.

“GLCs and financial institutions must step forward to complement the government efforts to directly assist lowly paid workers, as they are the most vulnerable group in any economic downturn,” he said, adding that MTUC will submit its proposal on the revolving fund to the Finance and Economic Affairs Ministries today. – February 20, 2020.