Geoffrey Williams of the Malaysia University of Science and Technology pointed out that the people did not have any more reserves, unlike during the first movement control order.
“Households have depleted savings and businesses have no stocks or cash buffers so the impact could be much worse. All income groups, B40 and M40 in particular, will be hit hard,” he told FMT.
He also warned that the country might lose more than RM2.4 billion per day, as businesses have been ground down further.
Williams suggested that the government allocate at least RM60 billion this time round, given that there would be two weeks of a full lockdown, followed by another four weeks of partial lockdown.
He also said direct cash handouts should prioritise those without income, the underemployed and young workers who have had their salaries cut.
“The basic idea would be to sustain the one-off effect of an increase in consumption and growth by supporting fundamentals, particularly disposable income. It should be done in partnership with businesses to slow down business closures, save existing jobs and create new ones,” said Williams.
Barjoyai Bardai of Universiti Tun Abdul Razak said a total of RM10 billion should be set aside to help micro-businesses, many of which were already on the brink of closing for good.
“They must immediately come up with subsidies to help the 8.5 million households in Malaysia.
“In the past, people were given RM150 to RM300, which is insufficient for living expenses. They should be thinking of at least RM600 a month,” he said, adding that beyond this, there must be a long-term economic recovery plan in place.
Barjoyai also expected the country’s gross domestic product to grow at 3% at most, instead of the projected 6% to 7.5%.
However, Carmelo Ferlito of the Center for Market Education stressed that a stimulus package was only a temporary solution as it was limited in scope and would increase deficit as well as inflation.
“You can tell me not to cut my hair for a month, but what will you tell the barber? Not to feed his family for a month? The best help we can get is a change of leadership and strategy,” said Ferlito.
He warned that it could also “shift the burden of all these nonsense decisions to future generations”, adding that the best way to help the economic sector was in allowing it to continue operating.
Meanwhile, Small and Medium Enterprises Association (Samenta) chairman William Ng said Putrajaya needs to offer immediate assistance to its SMEs.
He said SMEs have supported the government throughout the pandemic by avoiding retrenchments and urging their employees to register for vaccinations.
According to Ng, some of Samenta’s members have owed their landlords and suppliers money for months. They were hoping to deliver several pending orders to recover some funds, but the total lockdown will make this difficult.
“We are hopeful that the wage subsidy can be continued and extended to the end of 2021, along with an automatic interest-free moratorium on all bank loans and a reduction in utility charges for all businesses,” he said in a statement.
Earlier today, the Prime Minister’s Office announced that a total nationwide lockdown would come into effect from June 1 to June 14 in light of the worsening Covid-19 situation.
Under the total lockdown, only the essential economic and services sectors are allowed to operate.