PETALING JAYA: More incentives and initiatives could have been given to local SMEs in Budget 2024 to spur their recovery and the domestic economy, according to Small and Medium Enterprises Associations.
According to Samenta national secretary Yeoh Seng Hoo, the overall benefits to SMEs could have been more pronounced although there is an increase in supply-side initiatives in Budget 2024, rather than demand-driven incentives.
He said the flat economy is the biggest concern among its members and urged the government to provide more incentives and grants for SMEs to revive local demand.
“Contribution from SMEs as a percentage of gross domestic product rose by only 1.3%, not a significant increase. This shows that the recovery is still rather flat. We need to continue to stimulate domestic demand for SMEs.
“We hope that the government will continue to promote and encourage exports through grants and incentives. The domestic economy may not be growing at the suitable pace to support the faster recovery of SMEs,” he told SunBiz.
Meanwhile, SME Association of Malaysia national secretary-general Chin Chee Seong said overall sentiment of its members on the budget has been lukewarm.
He said its members are concerned about the service tax increase from 6% to 8%, which would affect consumer spending.
“This is something that we are not keen to have as we are looking for reduction not increase,” he said.
However, he lauded the government for the increased loan allocation to RM44 billion compared with RM40 billion in the previous budget. In addition, he called for more transparency in terms of the interest rate.
Its national president, Ding Hong Sing, is pleased that two of its association’s suggestions were considered in Budget 2024, namely the RM100 million allocation for digitalisation and loans under Bank Negara Malaysia amounting to RM900 million to encourage SME companies to increase business productivity through automation and digitalisation .
He added that the interest rate imposed is unclear albeit he has proposed for it to be set at 2% to help in the automation and digitalisation of SMEs.
He said the RM900 million is sufficient for upgrading of automation and digitalisation but insufficient for companies to set up costlier facilities such as smart factories.
Furthermore, he said grants such as Market Development Grant are important to increase more exports from local companies, boost branding of Malaysian-made products and improve the exchange rate of the ringgit against the US dollar.
Ding said the government should introduce more grants for exporters to help local SMEs and boost the overall economy.
“I hope the government looks into this because it is very important for the economy as the Malaysian market is small, so we must export to the international market,” he told SunBiz.
Source: The Sun Daily
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