Higher levy will deter foreign workers to Malaysia - Associations

The increase in the foreign workers' levy effective Feb 1, 2016 to RM2,500 for the construction sector from RM1,250 previously will deter new foreign workers from coming to Malaysia, Master Builders Association Malaysia (MBAM) said.

Its deputy president, Foo Chek Lee, said the increase will not only have an adverse impact on the construction industry but also other downstream sectors, among them transportation, logistics, services and manufacturing, either directly or indirectly.

"We are appealing to the government to put this on hold given the bad current economic environment.

"Instead of expecting an extra income of RM2.5 billion from the new levy, it is better for it (government) to legalise the illegal foreign workers, estimated at four million. The move is expected to bring in about RM5 billion in revenue," he said at a joint press conference here today.

The joint press conference involved the Malay Contractors Association, Guild of Bumiputera Contractors, Malaysian Indian Contractors and the Malaysian Air-Conditioning & Refrigeration Association (Macra).

Macra president, Datuk Seri Dr Ricky Yaw, said the aim of the imposition of the levy was not to generate revenue but control the number of foreign workers into the country.

"The announcement caught us by surprise as there were no engagements involved. It will also hurt consumers because the costs will be passed on to them," said Yaw.

Meanwhile, MBAM vice president, Tan Sri A.K. Nathan, said hiring foreign workers has become a challenge given the lower value of the ringgit and the implementation of Goods and Services Tax.

Nathan said the government should review and simplify the registration process for foreign workers to Malaysia in order to reduce the number of illegal foreign workers drastically.

"The current application process should be streamlined. We have no choice but to rely on foreign workers because we have to meet the timeline and deliver our projects, or face getting penalised," he said.

He said the costs now were even higher than hiring local workers, but sadly, many locals refused to work in the dirty and tough job environment.

"Also, they are not committed to the jobs and refuse to work long hours in the construction sector.

"Even though we have offered RM3,000 per month, they will still turn down the job as they prefer to work in air-conditioned room," he said.