KUALA LUMPUR: Industry players are preparing to embrace the multi-tier levy system (MTLS) as a means to decrease reliance on foreign workers and advance automation.
Their aspiration, however, is for the government to meticulously plan the MTLS and implement it gradually, ensuring it achieves the goal of creating improved job opportunities for locals and fostering automation and mechanisation.
The MTLS is a component of the 12th Malaysia Plan, aimed at reducing foreign worker dependency to below 15 per cent.
The New Straits Times has learned that the government is currently in the midst of discussions to formulate the framework of the MTLS.
Currently, the foreign worker levy is RM640 per person for the plantation and agricultural sectors, while the manufacturing, services, mining, and construction sectors pay a levy of RM1,850 per foreign worker.
Federation of Malaysian Manufacturers (FMM) president Tan Sri Soh Thian Lai said the implementation of the MTLS should be uniform across all sectors, with a transparent system and a pre-announced deadline.
Soh proposed that the announcement and details of the MTLS be made one year in advance, along with a clear plan and a transparent schedule of cost increases to minimise the impact on business costs.
He said it should also include incentives to reward businesses which reduced use of foreign workers.
Soh has suggested adjusting the levy rate based on the number of foreign workers employed as a percentage of total employment in a company and for the levy amount to be channelled back to the industry via the national TVET Apprenticeship and automation funds.
"Concurrent with the introduction of the mechanism, it will remove all hassles and uncertainties to applications and approvals by removing quotas on the number of foreign workers to be employed.
"This is in line with the different tier levels and the corresponding levy rates which the industry is prepared to pay.
"The mechanism guarantees approvals to recruit the number of workers needed as long as employers pay the price," he said.
He also called for the MTLM to come in tandem with the implementation of an end-to-end online foreign workers application and approval process to address weaknesses in the entire recruitment process which has led to incidences of workers being brought in without jobs
Malaysian Employers Federation president Datuk Dr Syed Hussain Syed Husman said there is an urgent need to rebrand and expand the scope of the jobs to justify higher remuneration to attract locals to sectors filled in by foreign workers.
"Locals need to be trained and retrained to ensure that they have the required skills to perform the rebranded jobs. All these will require time to be implemented," he said.
He also called for the government to intensify efforts to increase the female labour force participation rate to at least 60 per cent within a period of 10 years from the current rate of about 55 per cent.
"There is a need to relook policies to encourage senior citizens and PWDs to be gainfully employed. They are able to fill up the gaps left by foreign workers when employers need to systematically reduce reliance on foreign workers when MTLS is implemented," he said.
Meanwhile, SME Association of Malaysia president Ding Hong Sing said the increased levy might translate to an increased cost of goods and services as there is a hike in overhead costs.
He said the government should first help the industry increase automation and promote local products to the international stage before implementing the MTLS.
"If you use automation, you can get double the output with less workers. We can take China for example who is fully automated. In that way, they can also charge a cheaper price for their goods," he said.
Association of Employment Agencies Malaysia vice-president Suresh Tan said while the MTLS is a good move to reduce foreign worker dependency, it would not help solve the issue of foreign worker exploitation.