KUALA LUMPUR: The Malaysian Association for Training Providers (Matpro) has raised strong objections to the government’s plan to channel RM2bil from the Human Resources Development (HRD) levy towards subsidising graduate salaries.
The proposal, announced this week, aims to encourage the hiring of local graduates. While Matpro acknowledged the initiative’s good intentions, it warned that diverting levy funds away from training risks undermining the levy’s original purpose.
“The HRD levy was established to support training and workforce development," said Matpro in a statement on Friday (Aug 22).
"Using it for payroll does not align with the spirit of the law under the PSMB Act 2001 where Sections 14 and 15, which allow the use of levy monies only for courses, trainers, apprenticeships, and competency development.
"Malaysia is targeting an increase in skilled workers from 29.6% in 2023 to 35% by 2025, according to the 12th Malaysia Plan Mid-Term Review.
"However, progress has been slow, with only 29.2% of the workforce in skilled occupations as of 2025, compared with OECD benchmarks of 50–70%," said Matpro president Dr Maria Rufina.
Maria said that redirecting levy funds could derail efforts to build a stronger skills base.
“This diversion may lead employers to depend on levy subsidies for salaries instead of investing in meaningful training,”
The association cautioned that the plan could reduce training opportunities, widen inequality between large corporations and SMEs, and deliver only short-term job placements without sustainable employability.
"With more than 8,000 training providers and 35,000 trainers nationwide relying on levy-funded programmes, the entire training ecosystem could weaken, affecting Malaysia’s long-term competitiveness," Matpro said.
While recognising graduate unemployment as a pressing challenge, she urged the government to pursue interventions that focus on structured training, competency-based apprenticeships, and mentorship programmes.
“It is timely for the Human Resources Ministry, HRD Corp, and policymakers to review this initiative, safeguard the levy’s original mandate, and reaffirm that training—not payroll subsidies—is the sustainable path to building a skilled and competitive workforce.
“Malaysia must prioritise interventions that deliver lasting value, not just short-term relief, ” she added
