Press statement by DAP Secretary-General and MP for Bagan, Lim Guan Eng in Kuala Lumpur on 18 March 2021:
RM11 Billion Fiscal Injection Insufficient To Jump-start The Economy When RM45 Billion Economic Stimulus “Big Bang” Needed
Prime Minister Muhyiddin Yassin should review his economic numbers if he believes that his RM20 billion “Pemerkasa” economic programme, involving only a RM11 billion fiscal injection is sufficient to revitalise the economy.
How can a mere RM11 billion in fiscal injection pull Malaysia out of its economic recession, when the GDP contracted by 5.6% in 2020?
Muhyiddin appears to have forgotten that his RM305 billion Prihatin economic stimulus package and RM322.5 billion 2021 Budget last year, as well as the RM 15 billion Permai stimulus package in January this year, was deemed ineffectual in preventing either an economic recession or an international credit ratings downgrade for Malaysia by Fitch Ratings. Clearly the Pemerkasa RM11 billion fiscal injection is insufficient to jump-start the economy when RM45 billion economic “big bang” is needed.
Further the PN government has also missed their own targets of unemployment, GDP growth and Budget deficit. The Finance Ministry had projected the 2020 unemployment rate to rise to 4.2%, GDP growth rate to contract by 5.5% and the budget deficit to surge to 6%. Instead, unemployment rose to 4.5%, the economy contracted by 5.6% and the budget deficit ballooned to 6.2%.
Despite a list of small initiatives, Pemerkasa fails to inspire in that it sticks to the old paradigm of one-off payments instead of a sustainable recurring assistance until the end of the COVID-19 induced crisis. What happened to PN’s promise of increasing the monthly welfare aid to RM1,000 including the unemployed, 150,000 tablets and laptops for students, EPF self-withdrawals up to RM10,000 and also automatic extension of the bank loan moratorium (except Top 20)?
Whilst DAP endorses the proposed expansion of the COVID-19 mass vaccination programme and lifting of Movement Control Order (MCO) on states, Muhyiddin’s failure to cancel the RM10,000 fines for violating MCO restrictions is disappointing. What is the point of giving RM 500 one-off assistance to individuals and RM3,000 one-off grants to small businesses when they can be fined RM10,000 for individuals and RM50,000 for businesses?
Giving a little with the right hand but taking more with the left hand does not help to lessen the financial burden of the rakyat. The government should not be like an ostrich in the sand, in a perpetual state of denial at the severity of the economic recession on ordinary Malaysians and businesses. Not enough has been done to rescue the tourism industry that recorded RM100 billion in losses last year.
Therefore, the government must urgently implement an additional economic stimulus package of RM45 billion to help the unemployed, create new jobs and save existing ones, slow down business closures, provide rental subsidies for businesses, overcome the education crisis and provide new sources of future growth.