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09 Apr 2020
Economic downturn
Suggestion View - 272
How the F&B sector could have been helped

Here are the real problems faced by the food and beverage outlets. Does the three stimulus measures help them? Click here.

It would be difficult for these outlets to operate, in spite of the kind of financial assistance offered by the government.

If the government had adopted the measures that I proposed here, it might be more helpful to the businesses. Click here.

This is how my proposal would work:

a) The landlord will give a 50% rebate on the rental (for example) and get half of it subsidised by the government.

b) The businesses will put their workers on partial no-pay leave and the workers can get a relief loan from the govt for the loss of income.

c) The businesses get get a loan from the bank to cover their rental (which has been reduced) and their payroll (also reduced). The loan is guaranteed by the government.

These businesses can continue to operate on a reduced scale. They do not have to worry about their cash flow. They can wait for the crisis to blow over and for the economy to recover. They can then scale up their operation.

It may be another question about which businesses can succeed to repay back the loan. Some may, and some may not. For those that failed, the loans have to be written off. This would be the real cost to the government. It should be a manageable budget.

Tan Kin Lian

Tan Kin Lian
 


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