Tan Sri Ramon Navaratnam
Chairman Asli CPPS Center of Public Policy Studies
THE NEW FOREIGN WORKERS ` LEVY — WHY THE HURRY ?
Rarely have so many powerful Business organsations and high powered business leaders united so quickly ,to protest against the new foreign worlkers` levy that was surprisingly introduced on Monday !
This serious situation raises the basic question – why was this new Levy introduced in a hurry ? Why were the busimness community apparently caught unawares of this huge and untimely levy hike ?
We have a rich traditon in our country of Government and Private sector Consultations , on even the details of major economic policy changes , except of course Budget tax proposals . The surprised and stern reaction from the business leaders show that there was inadequate consultations on the rate and timing of the hefty rise in the foreign workers` levies .
There also appears to be some lack of coordiation among all the relevant Government agencies ? Otherwise the Minsistry of Trade and other economic branches of Government , would have influenced the Home Ministry to be more cautious about the pricing and timing of these new foreigh worker levies
The Businessmen have valid reasons to protest , on the following grounds –
1. The new hikes in the new Levies are too high , ranging from 100% to 300 % , For example the Construction workers levy will rise from Rm 1250/ to Rm 2500/ !
2. At this time of global and the Malaysian economic slowdown and falling oil prices and the Ringgit , the high rise in levies could raise business and consumer costs and reduce our competitionas well .
3. The sudden increase in worker levies could cause major disruption and a further slow down in production and exports .
In view of the above , I have the following Recommendations for consideration please -
1. It is ill advised for the Business community to ask for the Abolishment of this new levy ! Instead it would be more reasonable and practical for Busines to ask the Government , for a “calibrated phase – in“ of this new levy ,The new levy could also be much lower initially and could be raised later , when the economy and the businesses are more ready to adjust .
2. The Government can avoid Flip Flops by keeping the new policy , but Lowering the Levy increases to make the levies more acceptable to the business sector and also consumers .
3. In the meantime , please treat and consult the private sector as equal partners in development and do not spring surprises on them or catch them off guard !
4. The rise in foreign worker levies has much benefit , which should be highlighted to the public . The public need to be better informed on the overall costs and benefits on raising the worker levies , in the wider public and longer term interests .
5. The additional Rm 2.5 billion tha the Government hopes to gain from this new levy is atrractive – but it need not be over zealous in its collection , as it might also reflect Governement`s desperation to protect the Budget integrity !
6. There needs to be greater integration between this new policy on foreign worker levies and the new Minimum Wage policy which will come out this June ! I hope thre are no more sudden surprises on rates and timing !
7. There is plenty of speculation that these new levies could benefit Monopolies . If there is any truth in this , the Government must be bold to clear the air and increas competition , to benefit the vast majority of consumers rather than protect a few cronies , please ?
8. It is encouraging that the Government is finally trying hard to reduce the unnessarily huge influx and use of imported labour , — estemated at about 2.2 million legal and about 6 million illegal foreign workers . But it should have wider and deeper consultations with all the relevant stakeholders , with more care and considration, for the pulic good at large
Finally , it is agreed that we need to better manage the vast problems of the unweildly and contiuing inflow of foreign workers. But good policies must be backed up by more open and proper practices , for our country and people to prosper and succeed , please
Tan Sri Ramon Navaratnam
Chairman Asli Center for Public Policy Studies
February 4th , 2016
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