Budget 2022: Help SMEs till they recover, says human resource expert

By Mikhail Raj Abdullah

KUALA LUMPUR, Oct 12  -- Viable measures to support the return of small and medium enterprises (SME) under Budget 2022 should not be restricted to a short time-frame but extended to a longer period until they fully recover.

This is vital, given their significant contribution to creating employment opportunities, especially for those in the B40 category, says Gajendran Balasingam, chief executive officer of GKK Consultants Sdn Bhd.

For instance, “waiving of personal income tax for those earning below RM80,000 should extend for three years" and not applicable for just a year, he said.

This will enable SMEs to use their earnings to reinvest into more efficient office systems or equipment, upskilling and retraining staff, and even expansion of their businesses, he said in a statement today.

SMEs, he said, were particularly hit the hardest by the destructive COVID-19 pandemic, with many reeling from failed businesses and unemployment.

Supporting them fully was vital, given their significant contribution to gross domestic product (GDP) and employment opportunities, especially for the B40 group who need the most support.

Citing figures by the Department of Statistics, he said there are 1.15 million SMEs in the country, representing 97.2 percent of the total business establishments in Malaysia.

Nevertheless, he said it was assuring that many financial institutions were offering various packages to help SMEs restart their businesses or form new ones, with no collaterals being requested.

“Consider employees’ EPF and Socso contributions to be reduced by a few percentage points to stretch whatever income the SMEs start to earn," he said.

Gajendran said that company incentives could be implemented for staff to attend a minimum of three training modules per year with the Human Resources Development Fund (HRDF).

This would improve their business acumen, he said, adding that more training modules in IT applications must be embraced as almost every industry becomes more IT-centric.

Gajendran stressed, “SME Digital awareness and adoption is key. Again, continue schemes that fund training, guidance and also digital assets to SME for boosting their business set-ups. 

"The need to go digital is most critical, even more so now, but sadly, the adoption and follow-through among SMEs are lacking and that they need to find ways to sell their products and services through various channels.

“SMEs form the backbone of the country’s business landscape, so Budget 2022's incentives must be dedicated to recovery, upskilling employees’ skills and strengthening their businesses.

“This wold also help new set-ups to be formed and quickly become viable business set-ups,” he said.

Gajendran said GKK encountered more than 700 individuals, both top and middle management executives, who have had to close their businesses or were retrenched altogether because of the pandemic.

With the recovery, he noted that many want to restart their own business set-ups and not relying on being recruited.

As such, it should be compulsory for all SMEs to be registered with the relevant SME associations or corporations in order to enjoy various incentives and perks that the government can continue to offer them.  

Through such a registration, the statistics of the type of businesses that are flourishing post-COVID can be monitored, as well as the sectors that would need additional help.

"Additionally, it is time that SMEs aim to do business beyond Malaysian shores as the Internet era has no borders or boundaries, aim at ASEAN for a bigger market opportunity, and this is where the new demand lies," he said.

-- BERNAMA