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PETALING JAYA: Two proposals, one to impose new conditions on the hiring of foreign workers and the other to increase the tax on them, have been quickly rejected by interested parties and experts.
Instead of helping to solve the labor problem in Malaysia, they will only increase costs for companies and even disrupt supply chains, which are unaffordable, especially in times of crisis.
Malaysia’s over-reliance on foreign labor cannot be underestimated. 3D jobs (dangerous, difficult, dirty) are almost entirely taken over by foreigners, as Malays are reluctant to engage in such work, underscoring the important role migrant workers play in economic and infrastructure development from Malaysia.
However, according to the Malaysian Employers Federation (MEF), the knock-on effect of higher levies, from uncontrolled cost increases to companies relocating their operations overseas, would be too much to bear.
MEF CEO Datuk Shamsuddin Bardan told the Sun that raising taxes could force some companies to relocate their operations to countries where cheap labor is readily available.
He was responding to a proposal by the former president of the Federation of Malaysian Manufacturers (FMM), Tan Sri Yong Poh Kon, to gradually increase the tax on each foreign worker from currently RM150 to RM430. He said this would discourage employers from seeking workers abroad.
However, Professor Evelyn S. Devadason, Faculty of Economics and Management at Malaya University, said in a recent report that a similar measure in 2005 did not achieve the desired effect because rapid economic expansion continued to fuel demand for migrant workers. .
The Malaysian Trade Union Congress (MTUC) and MEF also agreed that instead of increasing the rate, the government should focus on “cutting the fat” from the migrant workforce, and that means deporting “unnecessary” workers instead. to hold them in detention centers.
These “unnecessary” workers are presumably the undocumented who, according to MTUC President Datuk Abdul Halim Mansor, currently number around three million.
However, a proposal for companies to pay for the deportation of illegal migrant workers has generated strong objections from FMM. Its president, Tan Sri Soh Thian Lai, pointed out that employers who bring in foreign workers through the proper channels are already paying a bank guarantee of RM250 to RM1,500 per worker.
The bank guarantee is to cover the cost of repatriation when the need arises.
Soh welcomed the government’s announcement that companies would now be allowed to fill vacancies with new foreign workers.
However, the conditions are very restrictive and would tax employers financially at a time when the country is struggling to survive the economic fallout of Covid-19, he said in a statement released Monday.
He said allowing only large corporations to bring in foreign workers, but denying small and medium-sized enterprises (SMEs) the same privilege would not help overcome the current labor shortage.
“Larger corporations still need the support of SMEs in their supply chain to support their operations,” he noted.
On the one hand, migrant workers are fundamental. On the other hand, they are expensive. With them also come their social problems and cultural differences, factors that have disrupted Malay society.
As MTUC noted, a comprehensive review of the entire process, from procurement and recruitment to management and repatriation, is essential.
So is the political will to make that happen.
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