Budget 2022 from the viewpoint of SMEs

Aimed at providing a better understanding of Budget 2022 from the SMEs’ perspective, a talk titled “Malaysia’s Budget 2022: SMEs Perspective” was co-organised by UTAR Department of Economics under the Faculty of Accountancy and Management (FAM), Belt and Road Strategic Research Centre (BRSRC) and Centre for Entrepreneurial Sustainability (CENTS) on 22 November 2021 via Zoom and Facebook Live.

The speakers of the talk

Invited to be the speakers were Dato’ Joseph Lim Heng Ee and Kerk Loong Sing. Dato’ Joseph Lim is the Industry Advisor for UTAR FAM Bachelor of Economics (Honours) Global Economics. He is also the founder-cum-managing director of Global Green Synergy Sdn Bhd, founder of X Club Entrepreneur Sdn Bhd, president of Malaysia Macau Chamber of Commerce (MMCC) and the vice president of Malaysia-China Chamber of Commerce (MCCC). Kerk, on the other hand, is the advisor of the ASEAN Research Institute of Guangxi University, China. He is also the vice president of MCCC and the Vistage speaker of the year 2019.

In the talk, Dato’ Joseph Lim and Kerk, both shared the Budget 2022 announced by our Minister of Finance Tengku Zafrul bin Tengku Abdul Aziz.

Dato’ Joseph Lim said, “There are several plus and minus points. From the perspective of the SMEs, the plus point includes the rise in Malaysia Manufacturing Purchasing Managers’ Index (PMI) which rose to 52.2 in October. Both the production and new orders from the manufacturing industry in October have increased. Most importantly, the Business Confidence Index and Consumer Confidence Index have seen an increase as well. This is somehow attributed to the relaxation of the MCO.  Hence, we are very eager for the opening of Vaccinated Travel Lane (VTL) because it should be able to bring better opportunities for enterprises. As for the minus points, right now we are facing a shortage of raw materials, containers and labour. The increase in costs may increase inflation. When the production capacity increases, it may interfere with the supply chain, and delivery delays may inhibit recovery.”

He continued, “The equal development of the two sexes is very important. The modes of thinking between men and women are different, so I agree to the point that it is mandatory for all public-listed companies to appoint at least one female director to support the development of women in the workplace.” He also encouraged the SMEs to move forward and encouraged the adoption of automation and AI technology to stay competitive. He suggested that government should give a hand to those potential hibernating and closed down SMEs such as the retail and service industry to reduce the unemployment rate.

He said, “I personally agree with the Goods and Services Tax (GST) very much. I think this GST is a very important strategy to solve our national income. We must replace the rescue plan with revitalisation and transformation; revitalise consumption by stimulating consumption and transform through infrastructure construction, which is more effective for the economy.” Meanwhile, he also talked about inflation and its effects on promoting Malaysia My Second Home plan.

Dato’ Joseph Lim concluded his talk by advising participants that they should not only have knowledge and wisdom but also the network and market to create a bigger vision that would bring changes to their lives.

Kerk, on the other hand, said, “The budget focused on three main purposes. The first purpose is to prevent and control the pandemic. The second purpose is to enable the SMEs to continue to survive and the third purpose is to reform and innovate.”

He then continued, “The government has announced the largest budget in the country’s history. The largest allocation goes to the education sector because our Malaysian budget has always attached great importance to the education sector. The second largest allocation goes to the Ministry of Health to prevent and control the Covid-19.”

The summary of budget 2022 from the SMEs perspective

In his talk, Kerk also mentioned the expansionary budget, the revenue, the operating and development expenditures, the 2022 fiscal deficit of Gross Domestic Product (GDP) which has dropped from 6.5 per cent to 6 per cent in 2021. “This is because our income has increased. Since we are still able to reduce 0.5 per cent in this situation, this is considered good enough because the world economy was hit badly due to the pandemic,” said Kerk.

He then moved on to share about Malaysia’s economic prospects, such as the arrival of tourists in Malaysia, palm oil, electronic and electrical industry and Brent crude oil.

World Economic Outlook April 2021 Growth Projections by IMF

Kerk concluded his talk by mentioning four main points which stated that the global pandemic has continued to deteriorate; the global economy would recover next year; the country's economy will gradually get better; and the political situation will affect the overall situation, so our political situation must be well-controlled and stabilised. Then, our government’s policies would steer our economic development.

Dato’ Joseph Lim (top row, second from right) and Kerk (top row, third from right) with participants

Click here to watch the Budget talk 2022.