Thursday 28 Mar 2024
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This article first appeared in The Edge Financial Daily, on January 27, 2017.

 

KUALA LUMPUR: The government is bullish about the implementation of the Employment Insurance Scheme (EIS) by Jan 1, 2018, three years after being introduced in Budget 2015.

Human Resources Minister Datuk Seri Richard Riot Jaem (pic) said the National Economic Council (NEC) of the Economic Planning Unit has approved the scheme this month.

Despite the absence of public information to enable open discourse on the scheme, the EIS is expected to be tabled in parliament in June or July this year.

In Budget 2015, the scheme was introduced to assist retrenched workers by providing temporary financial assistance, and opportunities for reskilling and upskilling.

“We did four presentations to NEC and they [finally] approved the EIS. We hope to table it in the cabinet by mid-year to be made into a bill, and deliberated in parliament. We hope it will be enforced by Jan 1, 2018,” said Riot.

He was speaking to reporters after presenting an accreditation certificate to Proton Holdings Bhd.

He declined to specify the details of the scheme, but it is understood that some employers have expressed opposition, saying the scheme is “burdensome”.

According to a ministry source, several local industry players who were met with showed discontent over the scheme due to the uncertainty over the quantum employers might be required to pay.

In past years, economists have called for the set-up of the scheme to help unemployed persons, figures that have shown an upward trend month-on-month.

According to the Department of Statistics Malaysia (DoS), the number of unemployed persons, made up mostly of graduates, climbed 8.3% to 510,700 in November 2016, compared with 471,500 the corresponding period a year ago.

In comparison with October 2016, it dipped a marginal 0.2% from 511,700.

Independent economist Dr Muhammed Abdul Khalid has said that one in three graduates are jobless, and that the number has risen to 34% in 2015 from 30% in 2013, with one in every 10 persons aged between 20 and 24 being unemployed.

Muhammed said the insurance would help laid-off workers or those who have lost their jobs to survive for three to six months.

“There is no cost to the government because the premium would be paid by employers and employees. People think it is expensive, but it is not because the median salary in Malaysia is RM1,700.

“If you multiply it by three months that amounts to RM5,100. How much premium would that be? It is not much, it is like motorcycle insurance,” he said last year.

World Bank senior economist Rafael Munoz Moreno whose call was for the government to establish an “unemployment benefit”, said it would provide the right support at the right time.

He added that it would also improve the quality of matching jobs.

Meanwhile, Riot said yesterday that the loss of 10,000 workers monthly was an “acceptable amount”.

“That figure is true but we should not panic. It is an acceptable amount,” he said.

Riot said based on the Organisation for Economic Co-operation and Development benchmark for unemployment, a country with a rating below 4% is considered to have full employment.

As of November 2016, the unemployment rate stood at 3.4%, based on figures reported by the DoS.

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