Thursday, April 16, 2020

This is my interpretation of the aid package

This is only my understanding. I might be wrong.

This is the current Prime Minister of Malaysia's annoncement.

This has a few assumptions, please read the assumptions.

From the news - (quoting The Star article -

SMEs stimulus package: Madam Lee, Haji Salleh and Surjit Kaur can now smile

. Underlined is quoted) 3 examples were given by the current Prime minister

1.

"For example, he said, Madam Lee, the owner of Lee Beauty Salon, an SME micro business with two local workers each earning less than RM4,000 a month, can get a wage subsidy for three months totalling RM7,200 and a micro grant of RM3,000."

Assuming they are earning RM3,000 a month, that will be RM6,000 a month for the 2 of them. For 3 months, that's 18,000. You are providing 40% of their salary.

2.

"Muhyiddin also gave the example of Restoran Mi Kolok "sedap" Haji Salleh in Kuching, Sarawak which can receive benefits totalling RM34,200 over a three-month period, excluding micro-credit loans."
"Let’s say this restaurant has five local workers with salaries of RM4,000 and below each, and two foreign workers. To meet the cash-flow requirements during the movement control order (MCO) period, the restaurant owner can get a BSN micro-credit loan of RM50,000 and wage subsidies totalling RM18,000 for five workers,” he added.
Assuming 5 locals = RM3,000 each and 2 foreign workers at RM1,500 each, over 3 monhs, that is RM54,000. You are providing 30% of their salary.
3.
For Syarikat Surjit Kaur Sdn Bhd, a small-sized company in the furniture manufacturing sector with five local workers earning RM4,000 and below, 10 foreign workers and the rest, local workers, with salaries of more than RM4,000, Muhyiddin said the owner stands to receive benefits totalling RM63,800.
I cannot see how the total benefits are computed. Assuming this company has more than 75 and less than 200 people, and the rest the same as before,
5 local workers at RM3,000 x RM800 per worker = RM4,000 per month in subsidies
10 foreign workers at RM1,500 = nothing in subsidies
and the rest local workers with salaries more than RM4,000? By my calculations, you are providing only RM12,000. Even if the 10 foreign workers all have their permits expiring this year, no way will you reach RM63,800.
This is all before the condition that revenue must have dropped more than 50% since January, way before the effects of covid-19 were felt. This will make most businesses ineligible for the grants. This is a very conservative view, and there are other rules that have not come to my attention.