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COVID-19 Economic Stimulus Package 2.0

27 Mar COVID-19 Economic Stimulus Package 2.0

Posted at 14:15h in 2020, Member's Update by

~ MACEOS Pushes for More Incentives to Help Members ~

A. CURRENT STATUS

Since the outbreak of COVID-19, Malaysian business events’ organisers have reported cancellation of a total of 53 business events and another 57 events have been postponed indefinitely – reported the loss of income as at 15 March 2020 is at RM1.5 billion.

A task force has been set up by MACEOS to deal with the crisis. Proposals have been submitted for Stimulus Package 1.0 and 2.0.

Task Force Members:-

  1. Dato’ Vincent Lim, President of MACEOS

  2. Kenneth Fong, Vice President – Exhibition of MACEOS

  3. Eric Ho, Vice President – Industry Partners of MACEOS

  4. Lee Mark, Vice President – Event Management of MACEOS

  5. Francis Teo, Honorary Secretary of MACEOS

  6. M. Gandhi, Group MD (ASEAN Business) & Senior VP of Informa Markets

  7. Winnee Lim, Sub-Committee – Education & Training of MACEOS

  8. Dee Dee Quah, Sub-Committee – Conference of MACEOS

  9. Gracie Geikie, Sarawak Region Committee Chair of MACEOS
  10. Alix Lim, Sub-Committee – Industry Partners of MACEOS
  11. Jason Teh, MACEOS Youth Chair

 

B. STIMULUS PACKAGE 1.0 (ANNOUNCED ON 27 FEBRUARY 2020)

On behalf of members, MACEOS has successfully pushed for the following measures under Stimulus Package 1.0 to mitigate the business cash flow amidst the outbreak:

1. Reduction in Operating Cost 

  • To provide a 15% discount in monthly electricity bills to hotels, travel agencies, airlines, shopping malls, conventions and exhibitions centres.
  • To exempt Human Resource Development Fund (HRDF) levies for hotels and travel-related companies.


2. Cash Flow Support

  • Bank Simpanan Nasional (BSN) will allocate a RM200 million in microcredit facilities offering an interest rate of 4% to affected businesses. In addition, the approval process for existing loan funds, such as Bank Pembangunan’s Tourism Infrastructure Fund of RM1.5 billion, will be further streamlined.
  • All banks are required to provide financial relief in the form of payment moratorium comprising restructuring and rescheduling loans for affected businesses and individuals. Bank Negara Malaysia will ensure that all financial institutions will assist all companies in need without exception.
  • Employees Provident Fund (EPF) contribution by employees will be reduced from 11% to 7% from 1 April to 31 December 2020. This will potentially unlock up to RM10 billion worth of private consumption. Malaysian workers have the option to opt-out from the scheme and maintain their own contribution rate during this period.
 
3. Human Capital Development
The Government encourages employers to further invest in raising the productivity of human capital during this current economic slowdown. Towards this, the Government will provide a double deduction on expenses incurred on approved tourism-related training. The Government will also provide up to RM100 million on a matching grant basis to HRDF to fund an additional 40,000 employees from the tourism and other affected sectors.
 
 

C. STIMULUS PACKAGE 2.0 (WILL BE ANNOUNCED ON 3PM, 27 MARCH 2020)

MACEOS has submitted on March 17 to Ministry of Tourism, Arts and Culture and Ministry of Finance with the following recommendations:

1. Cash Flow Support to the Professional Exhibition Organisers (PEOs)
This venue subsidy is an attempt to revitalise Malaysia’s reputation as the preferred business events destination and offset some of the many high-profile cancellations and postponements that have occurred in the region. This measure will certainly ease the financial pressure of exhibition organisers, many of which have spent extra cost on marketing and logistics to retain exhibitors and ensure the smooth operation of their events.
 
Recommendations
Subsidies for Exhibition Postponement and Cancellation:

(a) Exhibition Postponement in 2020 – 30% venue subsidy for affected exhibitions to reschedule within a period of one (1) year.
(b) Exhibition Cancellation in 2020 – 50% venue subsidy for affected exhibitions to be held in the year 2021.
 
A total of RM27 million is sought from the Stimulus Package 2.0.
 
2. Reduce Operating Cost of SMEs Businesses and Ease the Individual Financial Burden
(a) 6% Services Tax Exemption
The imposition of 6% Sales and Services Tax (SST) has put purpose-built convention and exhibition centres at a disadvantage as event organisers would prefer their events to be held in the hotels instead of convention and exhibition centres. MACEOS has appealed to the Government to waive the SST for now, with the hope that it will be lifted up altogether for convention and exhibition centres.
 
(b) “Tax holiday” for businesses and personnel to tide over the challenging period
To waive company and personal income tax for a period of six (6) months with immediate effect.
 
3. Employees Provident Fund (EPF)
To waive the employer’s contributions to EPF as a temporary measure to ease the cash flow situation. Government to contribute 13% EPF for a period of six (6) months to mitigate cash flow issues and giving the industry a breathing space.
 
4. Direct subsidies to attract more international event(s) to Malaysia to regain the country’s reputation as a business-friendly nation and attract more foreign investors.   
Hosting an international event is a proven gateway to create wider economic impacts through linkages with local sectors that could help Malaysians to expand their global investment, trade and professional networks. Once COVID-19 is under control, Malaysia needs to boost global confidence and assure business events stakeholders that the virus no longer presents a threat.
 
Recommendation
To incentivise a financial grant, specifically for the hosting/royalty fees through the Malaysia Convention and Exhibition Bureau (MyCEB) to support local SMEs to bid more international events to Malaysia.
 
 

D. PRECAUTIONARY MEASURES & STAY SAFE

We advise all MACEOS members to stay united to overcome this crisis together. Stay informed on the latest developments about COVID-19 and follow the advice issued by the Ministry of Health and World Health Organisation. Members are urged to take all necessary measures to stay safe and prepare for the turnaround in the country’s economy. There is still the silver lining in the dark clouds. 
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