Govt to eventually impose more foreign worker levies

  • Business
  • Tuesday, 03 Apr 2018

KUALA LUMPUR: The government will eventually impose even more levies to reduce foreign worker count in selected industries, said Second Finance Minister Datuk Seri Johari Abdul Ghani.

“We will impose more levies. At this moment, the levies are already high, so we will give them time to manage this. We need to manage our reliance on foreign workers,” he said on the sidelines of MBSB Bank’s new brand identity launch.

“We understand that we cannot have zero foreign workers. We still need them, but we need to reduce the number. Industries that rely heavily on foreign workers, we have to do away with this over time,” he added.

Johari said this move was necessary in light of the Bank Negara report which indicated that wages were too low in Malaysia.

“If we want to ensure the country can afford the minimum wage indicated by Bank Negara, we need to pay more attention to automating our industries. We have to start using artificial intelligence and so on. We cannot (solely) rely on foreign workers,” Johari added.

He said raising the minimum wage to a more comfortable level was a desired ideal for the country, but businesses need to be able to support this first.

“Ultimately, I will support these ideas to set the minimum wage at RM2,700, but we have to remember that if we look at our economy, some 97% of businesses are small and medium enterprises (SMEs). These SMEs have the task of creating employment. So, 65% or 6.8 million jobs are contributed by the SMEs,” Johari said.

“If you force the SMEs to pay that high a minimum wage, I think they would have a problem. So, we need to do this gradually to increase the minimum wage over time as the economy grows. That’s why we have to continually grow our economy so that companies can absorb the rise in the minimum wage,” he added.

The minister said it was important that any minimum wage increase would be able to be absorbed by the businesses, as otherwise the country would see unemployment figures spiking.

He said locals in certain sectors were still paid “quite okay”, namely, in the financial sector and in multinational companies.

“The only issue is local SMEs still being very much reliant on foreign workers. Because of this, the benchmark for local workers’ pay is always based on that. So, I think we need to manage this,” Johari said.

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