As fuel and energy-related costs continue to rise, the government cannot afford to delay action. More targeted and timely measures are urgently needed to ease the growing burden on small and medium enterprises (SMEs) and to prevent a wave of closures that could destabilise the national economy.

SMEs face increasingly severe operating conditions. A nationwide survey conducted in April shows that 76% of SMEs have been significantly affected, with no sector spared. More than 80% are experiencing double-digit cost increases, some exceeding 20%, while 45% expect serious cash flow pressures within the next three to six months.

SMEs form the backbone of our economy, comprising over 90% of businesses and providing substantial employment. If they are forced to scale down or shut operations, the impact on jobs and economic resilience will be immediate and far-reaching.

The government must respond with urgency. This includes introducing short-term operational support, expanding access to low-interest financing, and temporarily deferring or reducing selected taxes and statutory charges. At the same time, application processes must be simplified to ensure assistance reaches those in need without delay.

It is unrealistic to expect businesses to absorb rising costs indefinitely. If costs are passed on to consumers, inflation will worsen, creating a damaging cycle. Timely intervention is therefore essential not only to support businesses, but also to stabilise the market and protect livelihoods.

The government must also strengthen engagement with industry stakeholders and regularly review the effectiveness of its policies. Measures must be practical, targeted and responsive to real challenges faced by SMEs.

Beyond immediate relief, there must be a clear push for long-term resilience. The adoption of digitalisation, automation and energy-efficient technologies should be accelerated to reduce dependence on high-cost inputs and improve competitiveness.

On a related matter, the government needs to address the challenges faced by padi farmers. The scope of diesel subsidies must be expanded so that those genuinely in need receive direct and effective support.

Padi farmers undertake a critical role in ensuring national food security. However, current assistance of RM200 per hectare is clearly insufficient, given that diesel costs alone can reach approximately RM700 per hectare. Fuel costs now account for about 80% of total cultivation expenses, exposing farmers to rising production costs and threatening the stability of the food supply chain.

We propose that the government introduces diesel subsidy fleet cards for padi farmers to ensure targeted and efficient use of subsidies. Safeguarding farmers is essential to safeguarding national food security.

This is a critical moment. The government must act decisively to support SMEs and farmers, stabilise the economy, and lay a strong foundation for recovery.

Datuk Ir Lawrence Low
MCA Economic and SMEs Affairs Committee Chairman
MCA Vice President

6 May 2026

-MCA Comm-