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Government to moderate or withhold any further increases in cost in 2018 to ensure business sustainability and competitiveness

Press Release

The Federation of Malaysian Manufacturers (FMM) thanks the Government for taking heed to the call by industry in January 2017 by extending the implementation of the shift of levy burden back to employers by one year.

While the industry takes note that effective January 1, 2018, employers are responsible for the levy payments of their foreign workers, FMM calls on the Government to moderate or withhold any other further cost increases in the coming year considering that manufacturers already have to contend with challenging global economic conditions and rising cost of doing business due to other cost increase factors such as the increase in natural gas prices, implementation of the Employment Insurance System, additional foreign worker medical examination requirement, etc.

It is important that the Government should look at business sustainability in totality, considering all relevant factors which would have an impact; and not in isolation of issue by issue.  Given the importance of the manufacturing sector, the Government needs to adopt a more comprehensive and practical implementation of its foreign worker policy, taking into consideration prevalent economic and business conditions.

Specifically on foreign worker employment, FMM reinforces that it has always been supportive of online processes which would lead to greater efficiency, speed and transparency; as well as eliminate the need for human discretion and interaction, thus resulting in reduction of abuses. In this regard, we call for full implementation of the online or electronic processing of the entire foreign worker recruitment and approval process. In addition, the Government should remove all third party service providers in the country such as MyEG for the renewal of work permits as well as at foreign source countries such as for Single Entry Visa processing and Immigration Security Clearance which has resulted in additional bureaucracy and higher costs. All processes relating to the employment of foreign workers should be through one single system eliminating all rent seeking activities.

FMM reiterates its call on the Government to ensure that any changes to foreign worker policies should be pre-announced and gradual whether with respect to the quantum as well as timing of any increase in cost to allow companies adequate time to adjust. Changes and especially hefty changes with significant impact on business costs, should not be made overnight. In ensuring a sustainable business environment, the industry requires a foreign worker policy which is stable, consistent and efficient. 

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