KUALA LUMPUR: The Federation of Malaysian Business Associations (FMBA) is urging the government to extend the enforcement of the Temporary Measures for Reducing the Impact of Covid-19 Act 2020 (Act 829) as some businesses are still recovering from the Covid-19 pandemic.
FMBA chairman Datuk Abdul Malik Abdullah said businesses affected by the pandemic would no longer have special protection against their creditors when the government stopped the Act.
Abdul Malik said the situation was established when the government almost abolished the Act last year, and some businesses went bankrupt.
"The matter had affected the scores of the financial positions of those businesses when they had been listed in the credit reporting agency system and by the Malaysian Insolvency Department.
"It will take time to settle the debt, and could not be involved in any future business.
"This will also affect the economy when businesses that can recover and return to competitiveness have to close," he told reporters at the virtual press conference today.
Abdul Malik said that after evaluating and considering all the responses from its members, the association also calls on the government to introduce a special loan moratorium to support struggling businesses affected by the Covid-19 pandemic.
He said the government needs to introduce this special moratorium to give businesses space to re-strengthen the financial flow of their respective businesses that still cannot recover due to the current economic situation.
Meanwhile, FMBA vice chairman Raymond Woo said the businesses in Malaysia are still not on a strong footing due to the effect of inflation, increases in the Overnight Policy Rate (OPR), depreciation of the currency, and global concern.
Thus, Woo said the association is also urging the government to extend Act 829 for at least another six months or a year.
"Our concern is that more businesses may be unable to withstand the pressure from creditors."
"Thus, we hope this can be extended and enable a softer and more gradual improvement of businesses.
"When we are in a better position, hopefully in six months to a year, then I think this temporary measure could end," he said.
Woo said the association is also urging Bank Negara Malaysia (BNM) against hiking the OPR for a third time, saying this will not help mitigate the inflation in Malaysia.
He said the last OPR hike in July did not affect the inflation rate as it was caused by excessive demand and increased costs.
"Consumers at large are not spending as much as they did before because they have less money in their wallets.
"As of now, if BNM keeps increasing the rates, the interest adjustment will burden the people," he added.
The amendments to Act 829 were tabled by the Deputy Minister in the Prime Minister's Department (Parliament and Law) Datuk Mas Ermieyati Samsudin and were passed by the House of Representatives on December 16 and by the Senate on December 22 unanimously.
However, Act 829 will cease to be effective on October 22, 2022.