The Malaysian Reserve
28 February 2023
Challenging but positive budget for MSMEs
MECD is confident that the implementation of Budget 2023 can develop provide solutions to help entrepreneurs and cooperatives towards the sustainability of their businesses – pic Muhd Amin Naharul
AFTER a brief respite following the initial Covid-19 recovery last year, businesses are now getting edgy and bracing for continued volatility from high commodity prices, supply chain disruptions and the ongoing Russia-Ukraine conflict.
During the tabling of the revised Budget 2023 last Friday, Prime Minister Datuk Seri Anwar Ibrahim said small and medium enterprises (SMEs) particularly, will need sustained support to ensure they remain resilient amid the uncertainty.
Therefore, Malaysia’s latest measures to help micro SMEs (MSMEs) tide over difficulties will strengthen their ability to overcome challenges and promote the high-quality development of these businesses, Anwar added.
The Entrepreneur and Cooperatives Development Ministry (MECD) applauded the overall allocation of RM40 billion for MSMEs under the budget.
The government has allocated RM732 million for MECD, segregating RM520 million for development and RM212 million for management.
MECD is confident that the implementation of Budget 2023, themed Developing Malaysia Madani, can develop its socioeconomic as well as provide solutions to help entrepreneurs and cooperatives towards the sustainability of their businesses.
Speaking to The Malaysian Reserve (TMR), Small and Medium Enterprises Association of Malaysia (Samenta) national secretary general Chin Chee Seong said the budget presented by the PM looked great and he is optimistic about the MSME’s future.
Chin shared his enthusiasm upon learning that Budget 2023 addressed Samenta’s request for an increase in the threshold for the proposed tax reduction for businesses.
“I am grateful that the government will lower tax for low-earning groups and low-profit-earning MSMEs, as requested by the industry previously,” he said.
Furthermore, he said it is great that the government is initiating the digitalisation grant and urged the government to provide additional funds for the matching grant.
Moreover, Samenta Johor advisor Teh Kee Sin said the RM10 billion would help MSMEs move forward after facing difficulties over the past three years as a result of the pandemic.
“Many of us in the non-essential services were struggling as we were not able to operate due to the Movement Control Orders (MCOs),” Teh said.
He added that with SMEs now back on their feet, most of them have plans to expand their operations but are having problems getting loans from financial institutions.
“They should have some peace of mind as Syarikat Jaminan Pembiayaan Perniagaan Bhd is ready to guarantee up to RM20 billion for SMEs involved in high-tech industries, agriculture and manufacturing,” he added.
On another note, fiscal consolidation is important to regain investors’ confidence and improve the country’s credit rating.
The Federation of Malaysian Manufacturers (FMM) fully supported a gradual reduction of the 2023 fiscal deficit to 5% from 5.6% in 2022 and the government’s firm commitment toward medium-term fiscal consolidation.
In addition, persistent inflationary pressures are set to remain while economic uncertainties are likely to continue given the still challenging global economic and geopolitical outlook.
FMM felt that the scope for fiscal restraint is limited and a budget that protects the wellbeing of the people is warranted.
Hence, FMM applauds the government for unveiling a caring budget with a larger allocation of RM388 billion by striking a fine balance between fiscal discipline and helping the rakyat to cope with the rising cost of living.
BloomThis co-founder and CEO Giden Lim believed that the government is becoming more committed to advancing the local start-up scene, which is evident through the multiple aid that is provided for start-ups and SMEs.
“This as a whole will ultimately contribute to the country’s economic state,” he said.
(Web source: https://themalaysianreserve.com/2023/02/28/challenging-but-positive-budget-for-msmes/)