Press release by PCCCI
Dato’ Liew Sew Yee, President of Perak Chinese Chamber of Commerce and Industry, together with Dato’ Muhammad Muhiyuddin, President of Perak Malay Chamber of Commerce and Industry, Mr Ravi Sankar, President of Perak Indian Chamber of Commerce, Mr Tan Seow Heng, Chairman of Federation of Malaysian Manufacturers, Perak Branch and Dato’ Gan Tack Kong, Advisor to FMM, Perak met with YAB Mentri Besar in his office on Friday, June 19.
Dato’ Liew presented a memorandum to the MB explaining the problems faced by the business community in Perak. He explained that many businesses will be closing down if there is no assistance from the government in the next few months. He highlighted the following problems:
- F&B retail business: The SOP for F&B limits the number of customers dining in the premises, which is about 30% of the normal condition before MCO. As the cost of operation is the same, the income will be very much less. In addition to the SOP requirements, more expenses are incurred to buy hand sanitizers, sanitizing apparatus etc. All these will increase the operating costs, and with the decrease in sales volumes, businesses will be difficult to operate.
- Other retail business: Besides the SOP requirements and the costs of maintaining them, traders are facing problems of bad debts from regular customers. Turnovers will be affected as sales drop, but operating costs continue to increase. Moreover, increase of prices is not allowed by the government due to the price control regulations.
- Manufacturers: Due to the social distancing requirements, many factories are operating under half capacity. As with other businesses, the operating costs increase but output drops.
- Developers: Land issues under PTG and issues related to MB’s consent, KM’s approval, bumiputra waiver etc are taking too long (in some cases, 6 months) for processing, especially during this MCO period where relevant government departments and agencies were not functioning at full scale. This backlog is causing lots of financial constraints to developers, thereby affecting the whole construction industry. The chain reaction may be affecting more than 100 other industries that are related to housing development.
- Renewal of oil palm plantation leasehold land: The condition for the renewal of plantation leasehold land is that 5-10% of the land has to be given back to a Perak State Government nominated company. It is proposed that renewal of the leasehold land for 60 or 99 years be based on the land premium to be paid to the state.
In response, the MB explained that for restaurants and cafés, the number of diners per table is allowed to be 8 persons if they are all family members. He further explained that the state government is also very proactive in reactivating the economy and is willing to open up all the industries in Perak. The COVID-19 pandemic persists, but it is the people themselves who must take proactive steps on maintaining social distancing and personal hygiene to avoid spreading the virus. The people must understand that they need to practice SOP themselves to keep their whole family safe, not just themselves.
The MB was aware of many complaints on the delay in approvals on various government agencies. He said that the state government has a special unit called PULSE, which handles all the complaints from industries and enterprises in Perak. He requested PCCCI and other chambers to help disseminate the information they receive and to advise its members to channel the problems to their respective chambers. The chambers will then convey the problems to PULSE based on the priority and urgency of the problem. PULSE will take immediate action to help to resolve the problems.
Touching on the renewal of leasehold land of oil palm plantations, he explained that the state government is aware of the concerns of plantation owners. The state government may take back 5-10% upon completion of the leasehold land, but there are other options available which are subject to consideration by the State Executive Council (MMK). He further highlighted that the state government is taking up applications on a case by case basis based on various factors.
Dato’ Liew appealed to the MB to assist the business community by using his office to present to the relevant federal authorities for immediate action on national issues. The national issues highlighted are:
- EPF/KWSP contribution:
We propose that the contributions from employer and employee be lowered to half the present contribution.
2. Wage Subsidy:
We propose that the wage subsidy be extended until the end of 2020. It should include all industries including those that are allowed to operate during the CMCO and RMCO.
3. Moratorium on repayment of term loans:
We propose that the banks allow extension for another 6 months on the moratorium of repayment of all term loans.
4. Electricity Charges from TNB:
We propose that the charges for electricity usage should be given a 50 % discount across the board, irrespective of the amount of usage.
- Quit rent/Assessment /Licencing fees:
We propose that all fees be waived for the year 2020 and 2021.
2. Land issues:
We propose that the delivery system for land issues such as MB’s Consent, KM’s approval etc is to be improved to expedite the applications.
3. State Government to inject funds to the economy:
We propose for the state government to utilise the funds available in the cash-rich state-owned GLCs such as LAP to inject into the local economy to support enterprises, especially SMEs, to tide over this difficult period.
Dato’ Liew is of the view that many people have the misconception that companies that are doing well before MCO would need less assistance during the RMCO period. These companies will normally reinvest their profits so as to expand their businesses. In fact, many companies even take a large amount of bank loans to expand their operations. As such, these companies may be doing well, but their cash flow can only last three to four months. Therefore, the government has to provide financial assistance in various forms to help companies remain in operations, especially from now to the end of the year. Business has been slow, employees’ salary and other expenses need to be settled every month. Many companies will face cash flow problems in a few months’ time. He suggested that the state government announce some financial packages to help companies and enterprises, especially the SMEs, from closing down.
The MB explained that the national issues raised are already under discussions in the federal level. He agreed that he will try to raise these issues and hopefully something fruitful will be announced shortly.
On the state issues, the MB said that the state coffers depend very much on the collection of quit rent and assessments. He further mentioned that if the federal government can provide grants to the state, then it will look into the requests. As for the state GLC, unfortunately the usage of the funds in some of the agencies are, to some extent, subject to the approval of the federal government. However, he will look into ways and means to make the funds available.
The MB hopes that all Perakians will play their role in adhering to the COVID-19 pandemic SOPs. This is the new norm for us to carry out our daily life, keeping our family safe.