SMEs need more than broad promises in 13MP, say business groups

The Star

3 days ago

PETALING JAYA: The 13th Malaysia Plan (13MP) outlines broad ambitions for small and medium enterprises (SMEs) but lacks the clarity and targeted reforms needed to support their growth, say business groups.
SME Association of Malaysia national president Chin Chee Seong said the plan offers little in terms of fresh strategies to help SMEs scale up meaningfully.
'SMEs need clear pathways to reduce the cost of ESG adoption and obtain relevant certifications,' he said. Chin also questioned the feasibility of halving the country's reliance on foreign workers – from 50% to 10% by 2030 – without addressing current labour shortages.
'Even with digitalisation, many SMEs remain unsure how government support will help them automate or transform,' he said.
He proposed targeted grants or deferred payment schemes to support automation, especially in agriculture, where costs remain high.
'Plantations remain predominantly manual in operation. The ministry could designate land for SMEs to test new technologies prior to a wider implementation,' he suggested.
Prime Minister Datuk Seri Anwar Ibrahim tabled the 13MP with a pledge to boost SME contributions to GDP to 50% by 2030, alongside efforts to build a more progressive SME ecosystem.
Small and Medium Enterprises Association president Datuk William Ng said that while the plan's focus on AI, semiconductors, renewable energy and the creative economy is commendable, several gaps remain.
He said the High Growth, High Value strategy and expanded access to digital infrastructure and capital via government-linked companies (GLCs) and public-private partnerships are encouraging, but more must be done.
'Critical areas such as regulatory simplification and easier financing for micro-enterprises and startups are still underdeveloped,' he said.
Ng also called for clearer timelines for subsidy rationalisation and labour reforms to help SMEs plan ahead.
'To benefit from the 13MP, SMEs must shift from cost-based models to value-added operations, join strategic industry clusters such as halal and agrifood, and engage in R&D with academia and government,' he said.
Ng welcomed labour reforms but warned that many SMEs may struggle during the transition due to tight margins.
'Large firms can absorb higher wages or invest in automation more easily, but SMEs need tangible support to manage the shift,' he said.
MCA Economic and SME Affairs Committee chairman Datuk Lawrence Low said the Multi-Tier Levy Mechanism (MTLM) must be accompanied by targeted support to upskill the local workforce.
'A key part of this transition is equipping Malaysians with the right skills to fill roles currently dominated by foreign workers, particularly in the dirty, dangerous and difficult jobs,' he said.
He proposed a Local Workforce Transition Fund, financed through part of the levy collected under the MTLM, to subsidise training, job placement and wage top-ups.
Low also recommended lower corporate tax rates for firms investing in automation and productivity to ease the financial burden and accelerate transformation.