Budget 2021 no help to airlines, tourism sector, say Nufam, hotel and travel agent groups

On Friday, Finance Minister Tengku Zafrul Abdul Aziz tabled Budget 2021 at the Dewan Rakyat, worth RM322.54 bil.

The expansive budget was an addition to the six stimulus packages worth over RM300 bil announced this year, aimed at reviving the economy and push assistance towards those affected by the COVID-19 pandemic.

Ailing airline industry

BUDGET 2021 offers very little solution to the ailing airline industry and those affected by it, said the National Union of Flight Attendants Malaysia (Nufam).

Nufam secretariat said while the airline industry was one of the biggest economic contributors to the economy prior to the pandemic, the industry received little help under the budget.

“The airline industry is one the highest contributor to the economy but we only received pittance. We lost more than RM15 bil but the Government is just encouraging more layoffs,” it said.

Under the budget, the Government made an allocation of RM50 mil to retrain 8,000 airline staff members who were affected by the economic crunch.

Calling the sum pittance, Nufam said the Government should divert more resources and funds to keep the airline industry afloat and avoid redundancy.

It cited Singapore as an example, where its Government had agreed to cover losses of the airline industry until next year.

“And the sum amounted to US$750 mil. Much of it went to support those who lost their jobs but what did we get?” it asked.

For now, Nufam said, retrenched staff only have the Employees Insurance Scheme (EIS) to rely on to keep themselves going until they find a new job.

“But it will not be enough to cover their daily expenses and the Government gives them nothing else to weather an economic storm,” it said.

Last month, AirAsia Bhd and AirAsia X Bhd announced that it would retrench 10% of their 24,000 employees. This was after the low-cost carrier had already laid off more than 250 of its staff in June due to the pandemic.

Last week, Malindo Air laid off 2,000 of its staff. That accounts for more than half of its 3,200 strong workforce.

No help to tourism sector

The country’s leading hotel and travel agent associations say Budget 2021 falls short of the tourism industry’s expectations. 

The Malaysian Association of Hotels (MAH) said the tourism and hotel industries are deeply concerned with the lack of immediate assistance to stakeholders suffering from reduced cash flow due to both domestic and international travel restrictions.

It opined that apart from the extension of the RM600 wage subsidy per employee per month, which the industry has long voiced is insufficient, little was mentioned on sustaining tourism businesses.

MAH said the industry had repeatedly urged the government to consider a higher amount based on percentage, with 50% for employees earning up to RM4,000 a month and 30% for employees earning between RM4,001 and RM8,000.

The association welcomed the six-month exemption of the Human Resources Development Fund (HRDF) levy, noting that the industry had proposed this before.

“(But) without higher cash assistances to businesses and again leaving loan moratorium at discretion of financial institutions and commercial banks, industry stakeholders, especially hotels and travel operators, are left stranded and will be forced to make difficult decisions, as well as take drastic actions to survive,” it added.

MAH said the industry is grateful that the government is extending direct assistance to displaced airline employees, but wants Putrajaya to look at the situation in entirety where airlines, an essential stakeholder of the tourism industry, must also be protected.

“Malaysia cannot afford and should not allow any more closures in the tourism industry or risk even higher cost of rebuilding the industry and losing tourism capacity, leading to loss of revenue in the long run,” MAH said.

Separately, the Malaysian Association of Tour and Travel Agents (MATTA) also expressed disappointment over Budget 2021.

“Given the vulnerable and fragile situation of the tourism industry, Budget 2021 does not take into consideration the welfare of 3.6 million workers in the field and SME tourism companies. Travel demands will continue to diminish with the ongoing travel restrictions until a vaccine is widely made available.

“The budget has failed to meet the needs of tourism enterprises, particularly SMEs, and does not address the key issue of protecting jobs. The wage subsidy programmes should have been enhanced to avoid continuing lay-offs and the loan moratorium should be extended up to June 2021 for tourism businesses,” MATTA president Datuk Tan Kok Liang said in a statement.

Tan said the government should include reselling and training programme allocations for the tourism industry as a whole, not just the aviation sector.

He noted that in Singapore, practical and effective stimuli has been implemented, noting that the city-state is looking at reopening its borders.

“Budget 2021 has not managed to address the industry’s fundamental needs and we urge the government to reassess the support for the tourism industry, in order to harness the potential of the industry to generate jobs and growth and continue to contribute to the economy”, he added.

During his tabling of Budget 2021 at Parliament today, Finance Minister Tengku Datuk Sri Zafrul Tengku Abdul Aziz said the government was extending the implementation of the Wage Subsidy Programme for another three months, with a more targeted approach.

Zafrul elaborated that the limit of 200 employees per application would be increased to 500 employees. In total, RM1.5 billion has been allocated for this subsidy and is expected to assist 70,000 employers and 900,000 employees.

The finance minister also announced that the Tourism Infrastructure Scheme, along with the Maritime Development and Logistics Scheme, Sustainable Development Financing Scheme and Public Transport Fund, will be extended until Dec 31, 2023, with a fund size of RM3.7 billion.

At the same time, he said the government would be spending RM50 million on providing training and placements for 8,000 airline company employees in Malaysia.

Zafrul also announced that the government would be providing employment opportunities for 500 people in local and Orang Asli communities to work as tour guides at all national parks, to boost the ecotourism segment.

A sum of RM50 million would be spent on the maintenance and repair of tourism facilities in the country, with RM20 million allocated to improve infrastructure and further promote Cultural Villages in Terengganu, Melaka, Sarawak and Negeri Sembilan.

Meanwhile, RM10 million would be used for the presentation of national heritage buildings such as the Sultan Abdul Samad Building and Carcosa Seri Negara.

The finance minister also announced that the government would be allocating RM35 million to the Malaysian Healthcare Travel Council to enhance the competitiveness of the local health tourism industry. It will also be extending income tax exemptions for the export of private healthcare services until the 2022 tax year.

In Sabah, the government will be providing a grant of RM1,000 per person under the Geran Khas Prihatin to help 20,000 traders and hawkers in Sabah who have suffered by the lack of tourists to the state. It would also be given to taxi drivers, e-hailing, rental cars and tour drivers in Sabah as well.


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