The more modest package this time is based on Budget 2021 with some enhancement.
Prime Minister Muhyiddin Yassin today unveiled an RM15 billion aid package to help people cope with the second movement control order (MCO 2.0).
This is dwarfed by the RM250 billion aid package with RM25 billion direct fiscal injection announced shortly after the first MCO (MCO 1.0) last year.
However, Muhyiddin expects the impact of the MCO 2.0 to be less damaging to the economy, compared to the first one, as many businesses are allowed to operate.
A review of the measures announced showed many of them are already part of the Budget 2021 or are enhancement of existing aid packages.
To foot the latest round of aid packages, Muhyiddin said a recalibration of allocations is necessary, suggesting that Budget 2021 will be changed.
Among the measures aimed at the general population include:
1. Final phase of Bantuan Prihatin Rakyat payment of RM2.38 billion for 11.1 million recipients to be expedited. Payments start on Jan 21 (MCO 1.0 aid package)
2. First phase of Bantuan Prihatin Rakyat payment for eight million recipients with household income under RM5,000 (Budget 2021)
3. Food packs worth RM100 to qualified households worth RM50 million
4. RM25 million match grant by GLC/GLIC for social initiatives
5. Tax relief for donations
6. Targeted moratorium as previously announced (MCO 1.0 aid package)
7. Enhancement of i-Sinar EPF withdrawal with an expedited advance of RM1,000
8. RM2,500 tax relief on mobile phones, computer and tablets (Budget 2021)
9. Free 1GB daily Internet extended from Jan 1 to end of April (MCO 1.0 aid package)
10. Sales tax exemption on passenger vehicles extended to June 30 (MCO 1.0 aid package)
11. Allow those who need to delay Mara and PTPTN loan repayment to apply for a three-month moratorium (MCO 1.0 aid package)
12. One-off RM500 for 14,000 tour guides as well as 118,000 tour bus, school bus, rental vehicle and e-hailing vehicle drivers.
MCO 2.0, aimed at controlling movement to curb the spread of Covid-19, came into effect on Jan 13 and will last until Jan 26, with the possibility of an extension.
Help for businesses
On the business front, Muhyiddin said the government will enhance the wage subsidy programme announced during the first MCO, whereby all companies operating under the MCO 2.0 can apply, regardless of sector.
Under the scheme, the government subsidises RM600 of a worker’s wage if the employee earns less than RM4,000.
Muhyiddin said this programme will also be improved by expanding the number of workers that can qualify, per company, from 200 to 500.
This will cost RM1 billion and benefit 250,000 employers that hire 2.6 million workers.
Muhyiddin added that the government will loosen restrictions on the Employee Insurance Scheme (EIP).
Under the enhancement, contract workers whose contracts are not extended after previously being renewed for at least three times will qualify for unemployment benefits.
They will get 30 percent of their original salary for three months.
Muhyiddin also repeated Budget 2021’s measure to include delivery riders under the Social Security Organisation (Socso) scheme.
As for the special grant of RM1,000 to help businesses in Sabah, announced under Budget 2021, Muhyiddin said it will now be expanded to all states under MCO 2.0.
The grant was previously announced when Sabah was the state worst hit by Covid-19 but the pandemic situation has deteriorated in several other states, particularly in the Klang Valley.
Other measures include expediting micro-credit schemes and e-commerce campaigns, enhancing the guarantee scheme for businesses, which was announced during MCO 1.0, and extending the 10 percent electricity bill discount to six business sectors until March.
More importantly, the safeguards under the Temporary Measures for Reducing the Impact of Coronavirus Disease 2019, which among others protects businesses from the inability to fulfil contractual obligations, will be extended until March 31.
Funding to frontliners
Muhyiddin said the Health Ministry will be given additional funding of RM800 million, while the National Security Council will get RM200 million.
He also repeated the government’s Budget 2021 commitment to provide one-off RM500 payment to medical frontliners and another RM300 for non-medical frontliners serving during the pandemic.
The premier added that the ongoing monthly payment of RM600 for medical frontliners and RM200 for non-medical frontliners will also continue for as long as the pandemic is not resolved.
Furthermore, he said, RM100 million have been allocated to rope in private hospitals in treating Covid-19 and non-Covid-19 patients. He did not detail the model of this partnership.
The Covid-19 tests will now also be included under the medical tax relief, Muhyiddin added.