Mon, 18 Nov 2024

MoU will prove vital in energising the economy

On 17 September, 2021

From The RM45 Billion Financial Aid Injection In The PH-Government MOU, Double The Wage Subsidy Programme For All Its Workers, Offer Interest-Free Bank Loan Moratorium, Business Grants, Rental And Utility Subsidies.

The Hotel Royal Penang is the latest renowned hotel in Penang to shut down following the closure of the 5-star Hotel Equatorial and Holiday Inn Resort, due to the failure of the Federal government to save the tourism and hospitality industry following the COVID-19 imposed total lockdowns. The 276-roomed four-star business hotel will be closed by November putting hundreds of employees out of job.

Chief executive officer of the Malaysian Association of Hotels (MAH) Yap Lip Seng said that the hospitality industry has lost over RM11.3 billion with over 120 hotels closed down. The MAH June report showed that the industry achieved an average daily rate (ADR) of RM190 and an average occupancy rate (AOR) of 32% in 2020. ADR for 2021 is projected to be in the RM180-to-RM190 range, whereas AOR is expected to be far worse than last year, at 23%. This is a frightening prospect when the tourism industry lost RM100 billion last year.

The PN government’s 8 economic stimulus packages amounting to RM530 billion failed the tourism industry with not only much needed financial grants missing but also the Tourism Minister’s inability to help them survive the RM100 billion losses last year. Offering loans and tax deductions or rebates are meaningless when there is no revenue or business available.

With the RM 45 billion cash injection advocated by PH and agreed to by the Federal government in the Memorandum of Understanding(MOU) for Transformation and Stability between the Prime Minister and four top Pakatan Harapan Leaders in Parliament House on 13 September 2021, the Finance Ministry should be able to provide much needed financial aid. The tourism industry is too important to either ignore or abandon without any concerted financial assistance.

According to the Department of Statistics, the Gross Value Added of Tourism Industries (GVATI) in 2019 has recorded a contribution of 15.9 per cent to Gross Domestic Product (GDP) amounting to RM240 billion. As a start from the RM45 billion financial aid injection in the MOU, double the wage subsidy programme for all its workers, offer interest-free bank loan moratorium, business grants, rental and utility subsidies. Whilst we can argue on the quantum to be given, the problem is that if none is offered, none will be expected to survive.

Lim Guan Eng

DAP Secretary-General