THE 14TH GENERAL ELECTION (GE14) RESULTS SURPRISED MOST MALAYSIANS AND EVEN ANALYSTS WHO HAVE BEEN OBSERVING THE ELECTIONS. HOWEVER, ONE BIG UNDERLYING QUESTION IN THE MIND OF CORPORATES AND SME OWNERS IS: WHAT COMES WITH THE CHANGE OF GOVERNMENT?
The implementation of an unpopular consumption tax - the Goods and Services Tax (GST), as well as perceived government scandals, led to Barisan Nasional suffering its first defeat and worst result ever in a general election.
There has been a smooth transfer of power and the newly formed cabinet, led by political strongman Tun Dr Mahathir Mohamed, has immediately started working on managing the huge debt Malaysia is carrying.
Nevertheless, what is of a bigger concern to SMEs is the change of policies which will impact the business environment domestically. In this regard, the new tax structure poised to replace the unpopular Goods and Services Tax (GST) and minimum wage hike are highly placed on the “list of concerns”.
Under the previous government, business-friendly policies had been enacted, and foreign direct investment was encouraged. Although the statistics showed increasing trade numbers and GDP growth, many SMEs have voiced complains that they are not feeling the trickling effect. With the huge challenge of cutting operational expenditure and debts, the Pakatan Harapan (PH) government must act fast with effective plans to rebuild the integrity of Malaysia’s administrative body. This will help calm nerves in the market to boost investor confidence and improve consumer sentiment. With regards to SMEs, the new government has promised to spur investment and simplify business processes, especially for Bumiputera entrepreneurs. However, at the same time, PH has also promised to raise the minimum wage and strengthen workers’ rights, including the right to form trade unions.
A POST-ELECTION TRANSITION PERIOD
According to an analysis by Standard Chartered Research, there may be questions and policy uncertainty in the near term, following the election results.
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Denne historien er fra June 2018-utgaven av SME Magazine Singapore.
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