This article first appeared in The Edge Financial Daily on September 26, 2018

PUTRAJAYA: Just a day after announcing that employers would only have to pay 20% of the RM10,000 levy for each foreign worker, Finance Minister Lim Guan Eng did an about-turn, saying they will have to continue paying the levy in full to retain their skilled labour.

He said the decision to revert back to the original policy was made after a local Chinese daily reported feedback from foreign workers, saying the new policy — requiring them to pay the remainder 80% or RM8,000 of the levy — would burden them.

Hence, Guan Eng said employers wanting their skilled foreign workers to extend their stay beyond 10 years must pay the RM10,000 levy per annum. Otherwise, they will have to send their foreign workers back home and re-employ them as new workers, for which they only pay a levy of RM1,850 per year.

On Monday, Guan Eng announced that the levy burden would be split between employers and foreign workers after receiving complaints that the levy is quite a heavy burden to employers.

He made the announcement at the annual property developers’ conference — the Rehda Institute CEO Series 2018.

The collection of foreign worker levy was introduced by the Malaysian government since 1992. The levy was to be fully borne by foreign workers but the previous government decided it would be borne by employers instead, from Jan 1 this year.

BNM sets aside RM3.9b for SME financing

On small and medium enterprises (SMEs)  complaining about facing difficulty in getting financing from banks, Guan Eng urged them to make use of the financing available from Bank Negara Malaysia’s  (BNM) Funds for Small and Medium Enterprises.

He said there are still RM3.9 billion in the fund and SMEs should apply for this financing to grow their businesses.

“There is no reason why SMEs cannot get financing from banks,” he said, adding BNM has directed assistant governor Abu Hassan Alshari Yahaya to solve the issue.

“The government and BNM sincerely want to lend a helping hand to SMEs and micro enterprises,” he said.

Abu Hassan said of the RM3.9 billion in available financing, RM3.3 billion is for SMEs in all sectors of the economy, followed by the Bumiputera Entrepreneur Project Fund-i (RM191.4 million), Premier Agriculture Sector (RM97.9 million) and micro businesses (RM6.9 million).

Meanwhile, Guan Eng noted the government has identified the assets owned by 1Malaysia Development Bhd to be monetised and the attorney-general (AG) of Malaysia will reveal the list of assets.

“Even though we know which assets are listed, it is only appropriate for the AG to answer this as he is now handling these assets,” Guan Eng told the press yesterday.

On how the government would use the proceeds, Guan Eng said “any funds derived from the disposal of these assets will definitely have to go to the consolidated fund and will then be channelled to the relevant trust accounts”.