foreign worker levies to rm16 billion a year

Employers, unionists disagree on higher foreign worker levy
By Boo Su-LynKUALA LUMPUR, May 21 ? The Malaysian Employers Federation (MEF) called the proposed higher foreign worker levy ?ridiculous? while the Malaysian Trades Union Congress (MTUC) expectedly backed the government move to be implemented early next year.

Deputy Prime Minister Tan Sri Muhyiddin Yassin had announced yesterday government plans to increase the levy on foreign workers according to job sectors to cut dependence on foreign labour.

?I think this is very ridiculous. That is the softest word I can use,? MEF executive director Shamsuddin Bardan told The Malaysian Insider.

Although the government is exhorting the private sector to be an engine of growth, it is penalising employers for employing foreign workers, he said.

But the MTUC welcomed the move, hailing it as a good step in discouraging employers from employing foreign workers.

?I think it is a good move,? said MTUC general secretary G. Rajasekaran.

Increasing the levy on foreign workers is among the latest moves by the government to cut the foreign workforce to 1.5 million in three years from the current 1.9 million figure. The government will also encourage illegal immigrants to leave the country by offering them an amnesty once a biometric system at Malaysia?s entry points is in place.

?Employers in the private sector employing foreign workers is not by choice,? Shamsuddin said. ?They are forced to do it because of the fact that (there are) no local workers available that can meet their requirements.?

Rajasekaran, however, hit back at employers, saying that they were not expending enough effort in hiring local workers.

?We also feel that the employers ? they are not making enough effort to recruit locals,? he said. ?They always make excuses, saying that Malaysians are not willing to do the job... that is not correct.?

When asked if hiring more locals at higher salaries would eventually result in a price hike of goods and services, Rajasekaran said: ?We don?t see the cost going up for the consumers.?

The MTUC general secretary went on to say that there were cases where some companies announced job vacancies through prominent banners outside their factories in a superficial attempt at recruiting locals, but failed to call local applicants back after their interviews.

Shamsuddin refuted that allegation, saying that the government online recruitment site Jobs Malaysia revealed a higher number of vacancies than applications.

The proposed levy will be four times higher than the current amount, thus quadrupling the current RM4 billion foreign worker levies to RM16 billion a year, said Shamsuddin.

?Which employer can sustain that (400 per cent) increase?? he asked.

Muhyiddin, however, did not specify the amount of the levy hike yesterday, saying that the levy would differ between sectors and that unskilled workers would have to pay a higher levy.

Local workers shun industries like plantations, construction, furniture and certain manufacturing sectors like copper production, said Shamsuddin, noting they preferred to work in an air-conditioned environment despite higher pay in the ?harder? jobs.

A total 80 per cent of the local workforce are only SPM school leavers, thus making it difficult to replace foreign labourers who already possess the necessary skills in those industries, he added.

?We do not want to depend on foreign workers forever,? he said. ?Employing foreign workers is not cheap.?

Shamsuddin cited costs such as providing accommodation and transportation besides the levy, which can result in a total of RM5,300 in additional cost per employee.

Malaysia?s 1.9 million foreign workers are spread across sectors such as manufacturing (39 per cent), construction (19 per cent), plantations (14 per cent), housemaids (12 per cent), services (10 per cent), with the rest in agriculture.

?In the long run, the way is to increase the skills of workers,? he said. ?This must be done in stages... to reduce dependence on foreign workers.?

Besides training local employees, Shamsuddin suggested increasing the participation of the female workforce to 60 per cent from the current 46 per cent, which would create an additional 1.2 million employees. The retirement age should also be delayed to 65 years to add one million workers. The total 2.2 million workers would be enough to cover the number of foreign workers, he added.