MEF executive director Datuk Shamsuddin Bardan said it would reduce dependence on low-skilled foreign workers and augurs well for private sector employers.
“Overall, the government has tabled a positive budget in terms of attracting investments, job creation, reducing unemployment, reducing dependence on foreign workers, as well as incentives for employers, particularly SMEs to embrace new technologies and digitalisation,” he said.
He was commenting on the 2020 Budget, which was tabled in the Dewan Rakyat, here, today.
Shamsuddin said these initiatives were consistent with the MEF’s position over many years as workable strategies to reinvigorate the national economy.
“The increased budget allocation for the promotion of the education sector, in particular for technical, vocational education and training (TVET), would also assist in upskilling the Malaysian workforce which would accelerate industry initiatives to move up the value chain.
“The government’s decision to promote greater collaboration with industry would accelerate the mainstreaming of TVET and create better quality employment opportunities”, he adds.
Shamsuddin said the Apprentice@Work initiative would not only encourage more youths to enter TVET courses, but also allow employers to benefit from the extension of double tax deduction on expenses incurred by companies participating in the Skim Latihan Dual Nasional (SLDN) for another two years.
“This is in addition to the double tax deduction currently given to companies undertaking Structured Internship Programme (SIP) under the Talent Corp”, he said.
On digital transformation, Shamsuddin said the implementation of the National Fiberisation & Connectivity Plan (NFCP) would allow for the building of much-needed infrastructure to boost digital connectivity, especially in the rural areas and East Malaysia.
“Companies are excited with the roll out of 5G infrastructure as it opens up new possibilities for the industrial sector, which would allow our economy to move to higher value.”
However, he said MEF was concerned about the government’s proposal to increase the minimum wage from RM1,100 to RM1,200 beginning next year for cities and bigger towns.
He said it was not in accordance with the National Minimum Wage Act, which stipulates that the minimum wage rates may be reviewed every two years.
It was last reviewed with effect from Jan 2019 and the next review is expected only in Jan 2021.
“The federation had not been consulted on this important matter and it has huge cost implications for employers.
“Furthermore, the proposal to expand the scope of the Employment Act 1955 from RM2,000 to RM4,000 would further add to the cost of doing business,” he said, adding that extending maternity leave from 60 days to 90 days beginning in 2021 would further burden employers who were already paying 100 per cent for 60 days of maternity leave.
He explained that in developed countries and in other Asean countries maternity leave was paid for by Social Security.
“In Singapore, the government pays for the additional 24 days for the first and second births when the maternity leave was increased from 60 days to 84 days and the government pays fully the cost of maternity leave for the third and fourth births.”