COVID-19: MALAYSIA'S ECONOMIC STIMULUS PACKAGE

As at : 27 March 2020

Malaysia’s Prime Minister Tan Sri Muhyiddin Yassin recently announced a comprehensive economic stimulus package in a special televised broadcast on 27 March 2020. He also detailed initiatives to strengthen the nation’s financial position in the face of the Covid-19 outbreak and the month-long Movement Control Order (MCO).

The Prihatin stimulus package consists of RM128 billion for the people’s welfare, RM100 billion to support businesses including small and medium enterprises (SMEs), RM2 billion to strengthen the country’s economy, in addition to the RM20 billion stimulus package that was announced previously.

The government will prepare a Bantuan Prihatin Nasional, which is giving away cash in a one-off manner and channel it to the M40 and below. These include private sector workers, Felda workers, farmers, fishermen and petty traders.

Below is an updated summary of the latest initiatives:

1. RM1,600 has been allocated for close to 4 million household with a monthly income of RM4,000 and below. This allowance will be paid in two payments; RM1,000 in April and RM600 in May.
2. RM1,100 for nearly 1.1 million households with an income of over RM4,000 until RM8,000; RM500 to be paid in April and RM500 in May.
3. RM800 million for 3 million single people aged 21 years and above with a monthly income of RM2,000 and below; RM500 to be paid in April and RM300 in May.
4. RM500 for 400,000 single people aged 21 and above earning over RM2,000 until RM4,000; RM250 to be paid in April and RM250 in May
5. The Government together with TNB will add an allocation of RM530 million for discounts between 15% and 50% for electricity usage up to a maximum of 600kW a month for six months from the April bill.
6. RM500 million for Health Ministry to ramp up the capability and resources of Health Ministry
7. The Government has raised special allowance for healthcare workers from RM400 to RM600 a month from April 1 to end of pandemic.
8. Additional special allowance of RM200 a month for frontliners for police, immigration, Customs Department
9. RM200 one-off aid to students of higher education institutions who are affected
10. Free Internet from April onwards until the end of MCO
11. Exemption of rental payment for PPR and public housing for six months.
12. Insurance and takaful companies will set a RM8 million fund to bear Covid-190 screening test costs of up to RM300 each for policyholders
13. The Government will give a one off payment of RM500 to some 120,000 e-hailing drivers beginning April 1 with an allocation of RM60 million. This is in addition to the RM600 one-off aid announced for taxi drivers that was announced in the previous stimulus package.
14. The Government and BNM will set additional allocation of RM4.5 billion for SME and micro entrepreneurs which will comprise of five initiatives.
15. The Government will pay the salaries borne by contractors involved in the service sector, such as cleaning services and supply of cooked food in government agencies.
16. The Government will introduce a wage subsidy of RM600 a month for three months for employers with a 50% drop in business since January 1, for workers with a salary of below RM4,000.
17. The Government will continue all projects allocated in Budget 2020, including ECRL, MRT2 and the National Fiberisation and Connectivity Plan (NFCP) in line with its focus to ensure sustainable economic development.
18. The Human Resource Development Fund (HRDF) levy exempted for all sectors for six months starting April 2020.
19. The Federal government premises such as school canteens, nurseries, cafeteria and convenience stores exempted from rent for six months.
20. Government pensioners will receive RM500 one-off cash aid.

In the words of Malaysia’s Prime Minister, “We are a nation at war with invisible forces. The situation we are now facing is unprecedented in history. God willing, we will come out stronger when this crisis ends and the dust settles.”

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