PETALING JAYA: The Budget 2023 allocation of RM100 million grant is insufficient to assist small and medium enterprises to adopt automation and digitalisation, according to SME Association of Malaysia president Ding Hong Sing.
He proposed that the government increase the grant allocation to RM20 billion and shorten the processing time, which may take six months to a year, for applicants to receive approval.
“The RM100 million digitalisation and automation grant is not enough. At least if it was RM20 billion, you can (help) the SMEs in the manufacturing sector to quicken economy growth,” he told SunBiz.
Ding reasoned that to spur growth in the economy, the main driver would be “exports”. In order to achieve that, more allocation should be given to small and medium enterprises to invest in automation, which can address labour shortage issues. He added that two or three years is needed for SMEs to move towards automation.
Ding opined that the interest rates for loan facilities and the financing guarantees of RM40 billion are “not clear and very general” and hopes the government will look into providing zero per cent interest rate on its loans.
He proposed that the government absorb interest rates of SMEs that choose to take loans from commercial banks to spur their expansion and growth.
Meanwhile, Malaysia-China Chamber of Commerce (MCCC) vice-president Kerk Loong Sing said the sentiment from most sectors is “positive”, particularly those in green technology and information technology.
However, he noted that the sentiment depends on a member’s sector of business.
“It depends on what sector you are in. Some people are very happy because their sector is not affected, some are affected very much,” he explained.
“They have provided some incentives for SMEs ... cutting down the tax rate and increasing the taxable income to RM150,000, that’s very good. Also, the government has provided financial facilities of RM40 billion for MSMEs, so these are the incentives that stimulate our economy and help the SMEs,” he said when commenting on the Budget 2023 incentives for SMEs.
For the past three years, Kerk said, Malaysia’s foreign direct investments (FDI) have been performing badly. Among the reasons, he added, was political instability such as multiple changes of government, which affected investor sentiment.
“The Budget mentioned airports, other infrastructure, it’s good and helps to attract FDI, but then we should have more incentives to attract FDI. Never mentioned very much about FDI and domestic direct investment ... that’s not good enough, I think we should do more.”\
Kerk said Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim has been working really hard, visiting neighbouring countries and he is going to visit China, Malaysia’s largest trading partner. “All of this is important to have good diplomatic relations with our neighbours and other countries and that will be able to help to promote our FDI,” he said.
On digitalisation, Kerk opined that despite emphasis from the government, many SMEs are still not aware of its importance and the incentives provided.
“I call on the government department concerned to educate the public, to tell them why they have to go through digitalisation and what incentives the government have provided for digitalisation, automation. This is the mega trend, we just have to quickly go through digitalisation and automation,” he said.
Source: The Sun Daily
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