mdg

Oct 10, 2023

Soh said the government should announce several market support initiatives in Budget 2024, including incentivising domestic SME firms to go global with continued support in terms of grants such as the Malaysia External Trade Development Corp’s (Matrade) Market Development Grant (MDG). KUALA LUMPUR: Budget 2024 should focus on strengthening the competitiveness of the manufacturing sector, especially the small and medium enterprises (SMEs), and mitigate the impact of the global economic slowdown, according to the Federation of Malaysian Manufacturers (FMM). President Tan Sri Soh Thian Lai said: “Focus should be on market support initiatives to boost regional trade and relations. If the majority of SMEs have neither ambition nor access to the global market, their potential is capped by the domestic market size,” he told Bernama. Based on the FMM business conditions survey for the second half of 2022, he said only 9% of respondents were utilising the Regional Comprehensive Econ-omic Partnership (RCEP) implemented in March 2022, and 3% the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) implemented in November 2022. Without access to the global market, Soh said there is no chance for economies of scale and no hope for labour wage acceleration. In this regard, Soh said the government should announce several market support initiatives in Budget 2024, including incentivising domestic SME firms to go global with continued support in terms of grants such as the Malaysia External Trade Development Corp’s (Matrade) Market Development Grant (MDG).He said this could be done by expediting the implementation of the additional funding of RM20mil allocated to boost export growth under the MDG and the mid-tier companies development programme, removing the ceiling on the MDG for companies and expanding the threshold of the MDG granted for export acceleration missions organised by trade associations. He said the government should resume free trade agreement (FTA) negotiations with the European Union (EU) to ensure that Malaysia does not lose out, as the EU would present opportunities for greater access to the market for goods and services at more competitive prices. “The government must also expedite the implementation of the Government Procurement Act as announced in Budget 2023 to support business and economic revival as well as in building the capacity and capabilities of our local companies, especially SMEs. “SMEs, in particular, need more assistance, and we call on the government to continue supporting SMEs by setting up an environmental, social and governance (ESG) fund with an initial allocation of RM2bil to assist them to kick start their ESG journey,” he said. This includes assisting Malaysian companies in complying with the Carbon Border Adjustment Mechanism (CBAM) and EU Deforestation-Free Products Regulation (EUDR) requirements as part of their supply chain commitments. Meanwhile, Malaysia-China Chamber of Commerce national council member Lee Koh Yung hoped that Budget 2024 would make allocations for research and development (R&D) and local product procurement to support technological innovation and commercialisation. “The expanded R&D budget will be used especially to support the creation of new industries to catch up with the New Industrial Master Plan 2030,” he added. Soh also said Budget 2024 should include a double tax deduction incentive to cover ESG-related initiatives, including consultancy and certification fees and expenditures for those requiring external expertise with the ESG, CBAM and EUDR compliance programmes. To support green manufacturing practices, green energy consumption and renewable energy (RE) initiatives, Soh said the government should review and improve current policy and terms for the imports of RE components. Subscribe now to our Premium Plan for an ad-free and unlimited reading experience! Topic: