PUTRAJAYA should extend the moratorium on bank loans and inject additional financial assistance to avert negative economic consequences, in light of the extension of the recovery movement control order (RMCO), said Lim Guan Eng.

The DAP secretary-general said extending the RMCO without extending the moratorium on bank loans by six months and an additional injection of RM45 billion to the Covid-19 Economic Fund will adversely affect efforts to save Malaysian jobs, small and medium entreprises (SME) and manufacturers.

“The prime minister should realise the extension of the RMCO will have negative economic consequences that must be alleviated with financial assistance,” he said in a statement today.

The former finance minister said urgent economic measures are required to to pull Malaysia out of recession quickly, after it recorded the worst GDP performance among its regional peers with a contraction of 17.1% in the second quarter of this year.

“Why wait until next year when the government can help now? Saving jobs and businesses must be the priority now, (it should) not wait until next year,” he said.

He said businesses and workers will feel heartened to hear announcements on financial assistance to spur the economy along, and assured that the pandemic is under control.

Citing examples, Lim said more than 41% of Malaysian manufacturers have indicated that they will only be able to sustain themselves for less than a year, after reporting revenue losses due to the Covid-19 restrictions.

In addition to that, the country reported a high unemployment rate of 4.9% in June, which Lim said conceals the fact that many are underemployed, wherein professionals, such as pilots, have jobs other than flying airplanes.

“Worse are pay cuts. The Statistics Department in April reported 84% of private employees suffered pay cuts while Bank Negara also reported that, during the second quarter, private wages fell by 5.6% from a year ago,” he said.

“An extension of the moratorium on bank loans by another six months is also necessary. Eight million individual Malaysians and companies have benefited from the value of the loan moratorium at RM74.3 billion. Extending the loan moratorium by another six months after it expires on September 30 will only cost banks another RM6.4 billion,” he said.

Lim said the banking industry, which recorded a net profit of RM32 billion last year, has the ability to absorb this possible RM6.4 billion in losses if the moratorium is extended.

He said if the banking industry refuses to do so, then the government should bear the losses.

“What is RM6.4 billion compared with the RM295 billion economic stimulus package, and when it can help eight million individuals and small businesses?”

He said the situation will get worse without the government’s stimulus packages, wage subsidies and bank moratoriums and that an additional RM45 billion is needed to bring the total injection to RM90 billion to save jobs, SMEs and manufacturers.

Prime Minister Muhyiddin Yassin had announced yesterday that the RMCO will be extended until December 31 to curb the spread of Covid-19.

The Temporary Measures for Government Financing (Covid-19) 2020 Act bill was recently tabled in the Dewan Rakyat for a supplementary allocation of RM45 billion. – August 29, 2020.