Out-of-the-box strategies needed to save tourism industry, says ex-finance minister

PETALING JAYA (Feb 21): Ex-finance minister Tun Daim Zainuddin (pictured) has called for “out-of-the-box strategies” to save the local tourism industry which he describes as “bleeding to death”, reported FMT news today.

He gave the opinion that business losses can be carried forward indefinitely, providing the example of policies being adopted by the UK and Singapore.

“Currently, losses incurred by businesses can [only] be carried forward and offset against future profits for seven years. This is one way of mitigating cash flow problems faced by businesses. The government should remove restrictions on group company losses and allow offsets not only for start-ups but for all companies to alleviate cash flow constraints,” he told the news portal.

He explained that there can be “immediate measures that required little or no financial commitment”, such as a mandate to freeze “stop-the-clock or a moratorium on all repayments” to financial institutions, government agencies and GLCs; “including monthly interest, penalties or lease payments by companies in the industry”.

“This is not an exemption but a deferment. This will allow the sector to focus their energies, time and resources on how to regroup, rebuild and survive the pandemic.

“There was a moratorium. Unfortunately, it was limited to small and medium industries and with a very vague message about others being considered on a case-by-case basis. This was a recipe for disaster, creating unnecessary confusion,” he added.

Daim said resources have to be employed at “the right places” to help the industry.

“The vague messages and confusion had people wasting time and money in a long back-and-forth marathon with their lenders over whether they could apply for moratorium as many do not fall under the SME bracket,” he told FMT News.

“This has to stop before the damage is permanent. The banks can afford the moratorium. What is the alternative? Do banks want to be saddled with physical assets that they will not be able to offload anyway? They must not kill the goose that lays the eggs,” he said.

The travel and tourism industry “will need a longer time to heal, as recovery will only come when infection rates are down” and when infection rates fall with vaccinations being rolled out,  international borders opened again, he went on.

He added that tax incentives currently provided should be extended to at least 2022.

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