Malaysia to enter Recovery MCO from 10 June: All you need to know

Malaysia's Prime Minister Tan Sri Muhyiddin announced yesterday (7 June) that the country will exit the Conditional Movement Control Order on 9 June as planned, and enter into the next phase on the road to COVID-19 recovery. 

This next phase, the Recovery Movement Control Order (RMCO), will take effect on 10 June (Wednesday) up till 31 August. Here's what is to be expected during the period:

• Almost all social, educational, religious, business, economic sectors and more will resume operations in stages, while in full compliance with their relevance SOPs.
• Meetings and workshops will be allowed, but also in full compliance with health protocols and space optimisaiton.
• Inter-state travel and domestic tourism activities will be allowed, except to designated areas under the stricter, Enforced Movement Order (EMCO). While this is so, PM Muhyiddin has stressed the importance of maintaining hygiene standards, and taking care of vulnerable groups (e.g. elderly parents) in the process.
• International travels are still not allowed during this period.
• Commercial activities involving sales and marketing transactions outside of business premises will be permitted, as well as museum visit, indoor busking, self-service laundry, recreational fishing activities.
• Barbers, salon services, food courts, hawker centres, food trucks, morning and night markets, and bazaars will be allowed to re-open. 
• Sports: Team preparation exercises, activities such as bowling, badminton, archery, etc. which do not involve physical contact can resume with SOP compliance.
• However, sports or games involving large crowds (e.g. stadium events, swimming) and contact sports (e.g. rugby, football) will still not be allowed. 
• Hari Raya Aidiladha celebrations and worship services may resume, subject to SOPs put in place by Islamic religious authorities. As for other activities - church prayers, religious activities in mosques and houses of worship, the government is still elaborating on these and will make an announcement soon.
• Schools will open in stages following advice from the Ministry of Health; the Ministry of Education will make a detailed announcement on this soon.
• Pubs, nightclubs pubs, amusement parks, reflexology centers, karaoke centers, theme parks, large-scale religious parades, festivals, open houses, and any other activities that involve large crowds will still be prohibited.

Following this, after 31 August, the country will then enter a new normalisation phase up until a vaccine for COVID-19 is available. That said, PM Muhyiddin cautioned that in the event of a "sharp increase in COVID-19 positive cases" during this period, the Government "will not hesitate" to implement the EMCO in areas that need it.

He added: "What is important is that we must all be ready to inculcate new habits in our lives. Yes, sometimes we find it difficult to practice, but trust that each difficulty will be followed by pleasure."

 PM Muhyiddin announces RM35bn National Economic Recovery Plan

In similar news, PM Muhyiddin unveiled on Friday (5 June) a short-term plan in taking the country through COVID-19, known as the National Economic Recovery Plan (PENJANA).

The plan, themed 'Building the economy together', will cost RM35bn, and will include 40 initiatives across three key areas:

1. Empower the people
2. Propel businesses
3. Stimulate the economy

The key points for HR and employers to note about the PENJANA package are as follows:

To address the challenges of rising unemployment and ensuring employment retention, the Government will allocate close to RM9bn which is expected to benefit three million workers.

First, is through the expansion of the RM5bn Wage Subsidy Programme. Since its introduction in the PRIHATIN package and the additional PRIHATIN package, the wage subsidy programme has been well received by both employees and employers., and has saved over 2.2 million jobs.

To assist the company in the transition period of economic reopening, the Government will extend this wage subsidy for another three months. As the economy is gradually opening up, the wage subsidy is set at RM600 per month for up to 200 workers per company, PM Muhyiddin added.

For employees of the tourism sector and sectors listed in economic activity prohibited during the movement control period, and who have been required to take unpaid leave, employers may apply for wage subsidies provided that such workers receive direct subsidised payments.  

Second, to encourage employers to recruit, the Government will introduce the Employment Incentive Programme, in which companies will be given financial incentives to provide employment to the unemployed and youth. About 300,000 job seekers are expected to benefit:

• Incentives for hiring under-40s, at RM800 per employee; and
• Incentives to employ people 40 and above, and the disabled, for RM1,000 a month.

These incentives will be given out for a period of six months. 

Additionally, the unemployed who wish to upskill can claim up to RM4,000 worth of training allowances by SOCSO, even though they do not currently contribute to the Employment Insurance Scheme.

To assist the unemployed youth and to increase the employability of graduates, the Government will also give out incentives to employers who provide apprenticeships to these groups, at a rate of RM600 per month.

More than 200,000 to benefit from RM2bn skills development programmes 

PM Muhyiddin also announced that the Government will allocate RM2bn towards skills development programmes, targetted at both the unemployed and the youth.

• This includes training and placement programmes for the youth, the implementation of short courses at selected institutions, and training subsidies.
• For the unemployed, the Government will implement upskill programmes in key industries such as electrical and electronics, as well as ICT, and encourage the continuation of learning through short-term courses and training subsidies.

Apart from the above, the Government will also formulate policies to support the economic growth of gigs and the welfare of workers in this sector, with RM75mn to be allocated for the following measures:

1. A grant of RM50mn in match funding will be provided for the gig economy platform to contribute to its employees under the SOCSO Occupational Disaster Scheme and the EPF i-Remuneration Scheme; and
2. An RM25mn allocation to MDEC for the Global Online Workforce programme aimed at guiding Malaysians to generate income online through international clients.

To coordinate and monitor the implementation of all of the above initiatives, the Government will establish a National Working Committee. The Committee will be chaired by the Minister of Finance and the Minister of Human Resources with representatives from the private and public sectors.

Tax incentives and employment insurance protection for employers

In further encouragement for employers, especially the SME industry, to implement the concept of work from home, tax incentives as well as employment insurance protection will be provided. For example, income tax exemption of up to RM5,000 for employees who receive benefits in the form of a cell phone, laptop or tablet from their employer.

Similarly, in efforts to encourage micro-enterprises and SMEs to move to digital or online services, the Government together with the private sector will finance the venture through a matching grant of RM140mn. This provision will be used for training sessions, vendor subsidies, and sales assistance. This initiative will be spearheaded by MDEC with selected e-commerce platforms.

Next, for SMEs and mid-tier companies, the Government will continue to grant grants and loans totaling RM700mn to enable more companies to subscribe to or use digitalisation services. This includes:

• RM100mn SME Digital Matching Grants to be provided in collaboration with telecommunications companies;
• RM500mn under the PKS Technology Transformation Fund as easy loans; and
• RM100mn Smart Automation Grants, where each eligible company receives a grant of up to RM1 million.

In an effort to assist the sustainability of SMEs involved in the targeted interest sector, the banking sector will offer an additional RM2bn through the SME Financing Scheme. This financing can be applied from mid-June 2020 with a limit of up to RM500,000 per SME.

Further, to help the tourism sector, the RM1bn PANAJAN Tourism Financing Scheme will be offered to fund SME transformation initiatives in the tourism sector to stay competitive in the new era. Details of these funds will be announced by Bank Negara Malaysia in July 2020.

As for micro-enterprises, the Government will establish the Micro Funding in collaboration with Bank Simpanan Nasional and TEKUN Nasional for the financing of RM400mn, of which RM50mn will be dedicated to women entrepreneurs.

Apart from that, in a move to strengthen Bumiputera involvement and ensure sustainability in business and entrepreneurship, a grant of RM200 million will be offered through the National Entrepreneur Corporation Berhad (PUNB). In addition, RM300 million will be channeled to MARA where Bumputera entrepreneurs including affected skill institutes can obtain funding for working capital.

To assist SMEs with cash flow, beginning in July, SME Bank through the SME-GO Scheme will provide financing to 16,000 qualified Grade 2 and G3 contractors who have received projects under the PRIHATIN package. For the convenience of the contractor, no collateral or deposit is required.

In the Government's further efforts to assist 900,000 small and medium enterprises and local entrepreneurs, several tax measures and incentives will also be implemented:

1. To encourage the establishment of new SME entities, the Government has agreed to provide income tax rebates of up to RM20,000 per year for the first three years of assessment subject to the stipulated conditions. This income tax rebate is awarded to new companies established and operating between 1 July 2020 and 31 December 2021; and
2. To encourage SMEs to increase their competitiveness in doing business through mergers and acquisitions or M&E schemes, the Government has agreed to grant stamp duty exemption on mergers or acquisitions related to transactions completed between 1 July 2020 and 30 June 2021.

Photo / Screengrab of PM Muhyiddin's speech on 7 June, PMO's website