Saturday, March 12, 2016

Renesas Semiconductor Found guilty of union busting (Star, 12/3/2016)

See earlier post, which also provides the full award, and commentary

Electronic Union win in 'Union Busting' Case against Renesas Semiconductor? HRD Wan Noorulazhar?

87 Groups :- RENESAS MUST IMMEDIATELY ACCORD RECOGNITION TO THE UNION AND REINSTATE WAN NOORULAZHAR

 



Saturday, 12 March 2016

Found guilty of union busting

KUALA LUMPUR: An electronics company has been found guilty of union busting by the Industrial Court.
Court chairman Datuk Mary Shakila G. Azariah said Renesas Semiconductor KL Sdn Bhd had violated the Industrial Relations Act by its actions against members of the Electro­nics Industry Employees Union Western Region Peninsular Malaysia in its employ.

She said employers were lawfully bound to respect a worker’s right to engage in unionism and also they can participate in the lawful activities of a union.

She added that employers were also ethically and morally constrained from interfering with the affairs of a trade union and the right of workers to organise, discriminate, restrain, or coerce against any worker because of legitimate trade union activities and abuse authority in any form.

Mary Shakila said this in the complaint of union busting brought by the union against Renesas for breaching Sections 4(1), 4(3), and 5(1)(d)(i) and (ii) of the Act.

The western region union was registered on Dec 1, 2009, seven months after the Government approved the unionisation of the workers in the electronics industry into four regions. Previously, there were only in-house unions in the electronics sector.

In her 49-page award dated March 8, Mary Shakila said a Renesas employee, Wan Noorulazhar Mohd Hanafiah, was elected as pro-tem president of the union but he was told by the plant director that he “was not to promote the establishment of a national/regional wide union for the electronics industry” as the company would be forming an in-house union.

The union submitted a claim for recognition from Renesas on Jan 18, 2010 but the company refused to grant it.

A month later, the company organised a seminar on the setting up of an in-house union which was attended by members of the Joint Consultative Committee (JCC) in the company at Cyberview Resort & Spa.

Mary Shakila noted that the timing of the seminar left “a lot to be said” as to the motives of Renesas.

Wan Noorulazhar alleged he was offered the role of president in the proposed in-house union, which he declined, resulting in him being made to perform tasks below his job grade and being monitored by the Human Resources Department via CCTV.

He was later dismissed in 2011 after a domestic inquiry found him guilty of misconduct for allegedly maligning Renesas Semiconductor publicly on his Facebook page. Wan Noorulazhar is challenging his dismissal in the Industrial Court.

While Mary Shakila refrained from passing comment on his case, she noted that his termination was “manifestly a union-busting tactic”.

In evaluating the evidence, she said that the company’s witnesses, all still serving in the employ of the company, “are not to be believed.”

“The court is satisfied with the veracity of the union’s witnesses and their evidence, some of whom are still employed by the company and have risked their jobs to testify against the company.” - Star, 12/3/2016

Tuesday, February 16, 2016

104 Groups - Immoral for Malaysia to take from Workers to overcome national economic problems,Employers should pay the Levy – Not Migrant Workers

Joint Statement – 12/2/2016
Employers should pay the Levy – Not Migrant Workers
Immoral for Malaysia to take from Workers to overcome national economic problems

We the 104 undersigned civil society organisations, trade unions and groups are shocked by the news that the Malaysian government is increasing the migrant worker (foreign worker) levy to more than double the current rate, which since January 2013, had to be paid by the migrant workers themselves.  Prior to that, it was paid by the employer of migrant workers, whereby the introduction of the levy then was to deter employers employing migrant workers, rather than local Malaysian workers. This was also stated by the then Malaysian Labour Director-General Datuk Ismail Abdul Rahim who was quoted saying that, “…The rationale behind getting employers to bear the levy was to discourage them from employing foreigners…”  [Star, 16/4/2009]

Migrant Worker Levy Rates Drastically Increased as of 1/2/2016

The Malaysian government recently announced that, as of 1/2/2016, annual levy payable for each migrant worker is increased to RM2,500 (manufacturing, construction and service sectors) and RM1,500 (plantation and agriculture). Before this, the annual levy payable for a Migrant Worker in the Manufacturing sector (RM1,250), Construction sector (RM 1,250), Plantation sector (RM590), Agricultural sector (RM410) and Services sector (RM1,250 – RM1,850) which was so much lower.

This new rates in comparison greatly burden the migrant worker in that the annual levy payable per migrant worker will now be doubled, or even tripled. 

For example, a migrant worker in an electronic factory, classified under the manufacturing sector, who paid a levy of RM1,250 before, will now have to pay double, RM2,500. A worker earning a monthly minimum wage of RM900, which is the wage many migrants are paid, will now have to pay more than RM200 for levy, leaving them with only less than RM700 as their monthly wage, not taking into account all other wage deductions. This is most unjust.

It is unconscionable for the Malaysian government to target migrant workers in the hope of making extra income of RM2.5 billion for the country from the 2.1 million documented migrant workers in Malaysia to rescue Malaysia from its current financial woes.

Easily Exploited With Almost No Access to Justice Makes Migrant Workers Vulnerable to Employers

When Malaysia, introduced Minimum Wage, employers and employer groups complained that their labour cost had gone up, and they could not afford it. In response, the Malaysian government decided that employers no longer need to pay the migrant worker levy, thus the obligation to pay the levy fell on migrant workers themselves.

Contract substitution remains a problem. Migrant workers agree to come to work in Malaysia, but when they start working, the migrant workers complain that they are now paid lower than what they had agreed to in their country of origin with the employer and/or his agent. Many employers have also used the Minimum Wage of RM900, as the standard wages they pay migrant workers. 

Because of the debt incurred by migrant workers in coming to Malaysia to work, which is about RM5,000 and the practice of employers and/or agents holding on to their passports and work permits, migrant workers find themselves in a form of bonded labour, and not able to do anything else but just survive. 

With the very low wages, they receive; many are forced into doing overtime sometimes 4 hours per day, working on rest days and even public holidays to make ends meet. Malaysian law stipulates a draconian overtime limit of 104 hours every month. This means, in effect migrant workers can be forced to work for 12 hours a day because in many workplaces doing overtime is no longer an option that workers can refuse. As such, migrant workers and even local workers can be considered to be engaged in some form of ‘forced labour’.

For migrant workers, access to justice remains a myth for many. When they complain about rights violations, what happens in many cases is that they are terminated, and their permit to work and/or remain in Malaysia is also terminated. This causes migrant workers to be easily controlled and exploited cheaply. They do not even have the option to claim justice.

Employers Contribute Less to Migrant Workers Income

Under the Malaysian law, employers are required to contribute 13% of the monthly income, inclusive of overtime earnings, to the Employees Provident Fund, this requirement is not applicable to the migrant workers. This makes migrant workers cheaper.

Further, since many employers do not take in migrant workers directly as their own employees, but take and use them as workers who are supplied by the labour suppliers - legally known as the contractors for labour - it effectively prevents these supplied migrant workers the right to join in-house trade unions. Even if they do join national/regional unions, they simply will not be able to enjoy the extra rights and benefits that come by reason of a Collective Bargaining Agreement between Union and Employer, simply by reason that they are not recognised as employees. Calls for the abolition of the ‘contractor for labour system’ by trade unions and civil society have gone unheeded by the government. 

Malaysia recognizes that households earning less than RM4,000 a month requires financial assistance, and local workers do get a small assistance from the government through the BR1M program – but migrant workers are excluded from this benefit.

Weakening Ringgit Causes Migrants to earn 20-40% less.

Whilst, the financial problems Malaysia is facing, coupled with the increased cost of living - new taxes, increased transportation costs, and the weakening of the Malaysian Ringgit in relation to currency of the country of origins of migrants – it is the migrant worker who suffers the most. 

The weakening ringgit also means that the money migrant workers send back home to their families is now much less and this has a serious impact on their families/dependents and the ability to settle their debts back home. It was recently reported, that "For instance, employees from Bangladesh used to make 44 taka for every RM1, but now it is about 17 taka. The drop is very drastic, more than 40%."Even the ringgit to the Indonesian rupiah has seen a drop in value by 20%," (Malaysian Insider, 5/2/2016)

Unjust to impose New Financial Obligations On Migrant Workers Already In Malaysia

It is totally unjust for Malaysia to impose new financial obligations by law on migrant workers, which did not exist when they agreed with their employers to come and work in Malaysia for 3-5 years. Any new obligations especially of payment by migrant workers should only apply to new migrant workers who have yet to agree to come to Malaysia to work – certainly not to those who are already here and working.

The Malaysian Trade Union Congress(MTUC) and employer groups have been informed that employers will now have to  pay migrant worker levy. This was also mentioned in a media report, which stated, ‘The FMM[Federation of Malaysian Manufacturers] said the government recently informed employers that the levy burden would be shifted back to them. (Star, 2/2/2016).

However, employer groups have started a campaign lobbying the Malaysian government to re-consider, and 
the Malaysian government has been reported as saying that they may re-consider. There is concern that this re-consideration may not just be about the amount of levy payable, but also the question as to who will have to pay the levy – migrant workers or their employer?

Therefore, we the undersigned

Call on the Malaysian government in the name of justice, to ensure that it must be the employers of migrant workers that should be paying this Migrant Worker levy – not the migrant workers;

Call on the Malaysian government to also reconsider the increase of the levy rate, at this time whilst Malaysia, and especially small Malaysian businesses, are affected by the economic crisis and the effect of the falling Malaysian ringgit.

Call on the Malaysian government to increase the Minimum Wage of all workers in Malaysia to RM1,200 – RM1,500, to compensate for the increased cost of living in Malaysia, and the falling value of the Malaysian ringgit with  reference to the currency in migrant worker’s countries of origin. 

Call on the Malaysian government to abolish the ‘contractor for labour’ system, and ensure that all workers that are working in a workplace are all recognised employees of the said workplace, and are treated equally as workers.



Charles Hector
Mohd Roszeli bin Majid
Pranom Somwong

For and on behalf of the 104 organisations, trade unions and groups listed below 
ALIRAN
Alternative ASEAN Network on Burma (ALTSEAN-Burma)
Asia Monitor Resource Centre(AMRC)
Asia Floor Wage Alliance
Asia Pacific Forum on Women Law and Development (APWLD)
Association of Human Rights Defenders and Promoters- Myanmar
Asociación de trabajadoras del Hogar a Domicilio y de Maquila, ATRAHDOM, Guatemala, Centro Amercia. 
Bangladesh Groep Nederland (Bangladesh Group The Netherlands)
Bangladesh Institute of Labour Studies- BILS
BLAST,  Bangladesh
Boat People SOS (BPSOS)
Building and Wood Workers International (BWI) Asia Pacific Region
Campagna Abiti Puliti – Italy
CARAM Asia
Clean Clothes Campaign International Office(CCC)
Club Employees Union Peninsular Malaysia(CEUPM)
Coalition to Abolish Modern-day Slavery in Asia (CAMSA)
Crispin B. Beltran Resource Center (CBBRC),Philippines
CWI Malaysia (Committee for Workers International)
Defend Job Philippines
Fair – Italy
FAIR ACTION, Sweden
Foundation For Women, Thailand 
Garment and Allied Workers Union, India
German Clean Clothes Campaign
Homeworkers Worldwide, United Kingdom
IDEAL (Institute for Development of Alternative Living
IndustriALL Bangladesh Council (IBC)
Institut Rakyat
International Labor Rights Forum
Jaringan Rakyat Tertindas (JERIT)
Jatio Shromik Federation (JSF), Bangladesh
Karmojibi Nari (KN), Bangladesh
Kesatuan Pekerja-Pekerja Perodua
Kesatuan Sekerja Industri Elektronik Wilayah Selatan, Semenanjung Malaysia (KSIEWSSM)
Knowledge and Rights with Young people through Safer Spaces (KRYSS)
Labour Behind the Label
Labour Studies and Action Centre (CEREAL), Mexico
Legal support for Children and Women (LSCW), Cambodia
MADPET (Malaysians Against Death Penalty and Torture)
Malaysian Election Observers Network
Malaysian Trades Union Congress (MTUC)
MAP Foundation (Thailand)
MHS Aviation Employees Union
Migrante International
Mission for Migrant Workers
Myanmar Migrants Rights Centre
NAMM (Network of Action for Migrants in Malaysia)
National Garment Workers Federation (NGWF), Bangladesh
National Union Employees in Companies Manufacturing Rubber Products (NUECMRP)
National Union of Transport Equipment & Allied Industries Workers (NUTEAW), Malaysia
NLD LA Malaysia
North South Initiative
Oriental Hearts and Mind Study Institute(OHMSI)
Panggau Sarawak
Paper Products Manufacturing Employees’ Union of Malaysia (PPMEU)
Parti Rakyat Malaysia(PRM)
Parti Sosialis Malaysia (PSM)
Pax Romana ICMICA
Peoples Service Organisation (PSO)
Persatuan Sahabat Wanita Selangor (PSWS)
Pertubuhan Angkatan Bahaman, Temerloh, Pahang, Malaysia
PROHAM -Persatuan Promosi Hak Asasi Manusia
Radanar Ayar Rural Development Association, Myanmar
Repórter Brasil
Safety and Rights Society, Bangladesh
Sahabat Rakyat
Schone Kleren Campagne (CCC Netherlands)
SEA Women's Caucus on ASEAN
Solidarity of Cavite Workers (SCW), Philippines
Sramik Nirapotta Forum, Bangladesh
SUARAM
Tenaga National Berhad Junior Officers Union (TNBJOU)
TENAGANITA Women’s Force, Malaysia
Textile Clothing and Footwear Union of Australia
The Collectif Ethique sur létiquette, Clean Clothes Campaign French
Think Centre, Singapore
UNI Global Union
War on Want
WARBE Development Foundation, Bangladesh
WH4C (Workers Hub For Change)
Women Peace Network-Arakan, Myanmar
Women Rehabilitation Center (WOREC), Nepal
Workers Assistance Center, Inc (WAC) , Philippines
Vietnamese Women for Human Rights
Yaung Chi Oo Workers Association-YCOWA
Yayasan Lintas Nusa, Indonesia
IMA Research Foundation, Bangladesh
International Trade Union Confederation(ITUC)
Women's Aid Organisation(WAO), Malaysia
PINAY (The Filipino Women's Organization in Quebec), Canada
Cividep India
Kesatuan Sekerja Industri Elektronik Wilayah Utara Semenanjung Malaysia
Centro Nuovo Modello di Sviluppo – Italy
National Union of Flight Attendants Malaysia (NUFAM)
Pusat KOMAS
Perak Women for Women Society (PWW)
Asian Migrant Centre
Center for Alliance of Labor and Human Rights (CENTRAL)-Cambodia
Labour Education and Service Network
Mekong Migration Network(MMN)

Kilusang Mayo Uno (KMU), Philippines

MARUAH, Singapore
Center for Migrant Advocacy (CMA) Philippines
 



Media coverage:- 

Employers should pay foreign worker levy, say civil society groups (Malaysian Insider)

'IMMORAL' MALAYSIA GETS A TICKING OFF: Bosses should pay the levy – NOT the migrant workers (Malaysia Chronicle, 13/2/2016))

Employers should pay the levy, not migrant workers (Malaysiakini, 12/2/2016)

 

The said Joint Statement was send to the Prime Minister of Malaysia, Minister of Human Resources, Minister of Home Affair (who is in charge of the Immigration Department), Opposition Leader in Parliament and SUHAKAM(Malaysia's Human Rights Commission). The emailed copy can be seen at ...

101 Groups Letter to PM Najib - Employers should pay the Levy – Not Migrant Workers , Immoral for Malaysia to take from Workers to overcome national economic problems

 

 

 

Sunday, February 7, 2016

Reducing worker savings for old age - to allow them to spend now to save Malaysia is Wrong?

EPF:- Workers suffer again BN Government proposes reduction of EPF contribution?

Najib Tun Razak and the BN government is now proposing that the workers contribution to the Employees Provident Fund(EPF) will be reduced by 3%. 

Sounds great - but wait a minute. This would mean that the amount of monthly monies paid into the Worker's EPF Account would reduce...and this is not right as the EPF is the 'Simpanan Hari Tua' (Savings for old age) - this money is to sustain the livelihood of the worker and his family/dependents in their old age when the worker is no longer able to work and earn....until the day he/she dies.

Public servants generally will get pensions right up to the day they die, and thereafter pension will still be paid out to their spouses, and children who have yet to reach the age of majority. These workers, under the EPF scheme, do not have this guaranteed pension payments. It will be the money that they have in their EPF accounts that is expected to support them in the old age.
As it is, it has already been acknowledged, that for most workers in Malaysia, the amount of money that will be in their accounts will now be insufficient to be able to provide for the livelihood of the worker in his old age, In fact, I believe the government is trying to deal with this very real problem with some form of a 'pension scheme' - but it is all work in progress.

So, this BN government is asking poor workers to reduce the save for their old age - and spend that money now. This is so irresponsible.

If Najib is saying that the workers mandatory contribution is reduced by 3%, whilst the employer's contribution is increased - which results in the same amount of monthly contribution to the EPF accounts, then it is OK.

If Najib is saying that the worker's mandatory contribution is reduced by 3%, and the government will bank in the said 3%- which results in the same amount of monthly contribution to the EPF accounts, then it is OK.

But certainly not, this 'save less for your old age' proposal is absurd, and at the end of the day, it is workers under the EPF/KWSP scheme that loses out in the long run.
WHY? So workers will have more money to spend to help the Malaysian economy. This logic was also used in the past by the BN government in the past - when they started allowing workers to take out money from the 'old age savings account'(EPF Account) to spend now for houses, etc...Then also, the rationale, I believe, was to ensure that more money will be spend now by these workers for the sake of the Malaysian economy... 
How much really should a worker be having in his/her EPF account when he/she reaches 55/60/65 to allow him to be able to survive and sustain his/her and dependents livelihood until he/she dies? RM250,000 - RM300,000? Well, we know that for most workers, they will not have even that amount. Factor in the ever increasing cost of living, and also the other monthly loan-repayment obligations. Some workers who purchased homes, will still be repaying loans even after they reach the age they can withdraw from the EPF (old age savings account).
A perusal of the workers, who have already withdrawn from the EPF account, will also show that many of them now do not enough money to sustain their lives until they die.
Hence, Najib's proposal is short-sighted and do not take into account the future lives of workers and their families.
Remember, the EPF scheme affects all private sector workers - and, this BN government, has been shown to be not bothered. While, government employees minimum wages are raised now to RM1,200, the private sector minimum wage will be raised maybe in the middle of the year to just RM1,000. Government employees have COLA[Cost of Living Allowances], private sector workers do not have this. Government employess enjoy access to very low interest loans, but private sector workers do not.
Government employees generally enjoy regular employment until retirement - but in the private sector the government is allowing the unfettered rice of precarious employment practices - short fixed term employment contracts, the unjust contractor for labour systems,...
Now, Saudi Arabia allegedly gave Najib a RM2 billion 'donation' - but he allegedly returned a large amount of it to the donor - that could have been donated by Najib Tun Razak to the government...?
Our target must be that the workers earn MORE and that is sufficient for the livelihood, and for their spending now. They should not be forced, to reduce the contribution to their 'savings for their old age'.
It is the government itself that is to be blamed for the increase of cost of living - so, what needs to be done is to reduce that, so the monies earned by workers now is sufficient...
When a worker takes a loan, he pays high interest to the bank - but if he saves his money in the bank, he receives such low interest. Then, the government allowed banks to impose other charges for withdrawals, for bank statements, etc .. In short, it looks like the Malaysian BN government discourages savings and encourages spending...and for the future of the worker and their family, this smells trouble...
So, Malaysia must increase subsidies for the basic minimal items required by the worker and family for survival. 
Maybe, the government should abolish road tols... reduce water and electricity rate...
Maybe, the recent increase in MP, Senators and ADUNs allowances should be reduced... PM and Ministers pays should be cut. GLC CEOs, Directors and
Sadly, the rich feels it not - but please do consider the majority who are poor... 

Worker earning RM1,000 - with reduction of EPF contribution by 3%, he will take home an extra RM30 a month, RM360 a year. 

RM360 a year - with, say an EPF interest of 6%, he gets  RM21 in interest per year.

So, happily the government said that all this will be spent - RM8billion. Hello, that is the workers' money not being saved but spent... 

REVISED BUDGET 2016: Workers’ EPF contribution cut 3%



EPF contribution by employees will be reduced by 3% under the revised Budget 2016. – The Malaysian Insider file pic, January 28, 2016.EPF contribution by employees will be reduced by 3% under the revised Budget 2016. – The Malaysian Insider file pic, January 28, 2016.

 


Prime Minister Datuk Seri Najib Razak announced the following measures under Putrajaya's recalibration of Budget 2016:
  • EPF contributions by employees to be reduced by 3% from March this year until December 2017. Contribution rate by employers, however, remains the same.
  • Najib said the reduced contributions would boost spending by an estimated RM8 billion.
  • Tax exemption of RM2,000 for Malaysians earning RM8,000 and below for the financial year of 2015, a move that would affect two million tax payers.
  •  
Food and cost of living
  • To reduce the cost of daily food items, approved permits (APs) for agricultural products, including coffee beans and meats, will be liberalised.
  • The Federal Agricultural Marketing Authority (Fama) will open MyFarm outlets to sell produce direct from farmers to consumers at prices between 5 to 20% cheaper.
  • Domestic Trade and Consumer Affairs Ministry to increase the number of affordable shopping outlets like hypermarkets.
  • RM50 incentive for every metric tonne of rice for paddy farmers.
  • MyBeras programme introduced – 20kg of free rice for every registered hardcore poor household.
  • GST to remain at the same rate (6%).
  • Cash aid programme BR1M will be continued: "The government will not compromise on what is right for the country and people," Najib said.
Housing
  • For new housing developments, sale of houses priced not more RM300,000 to be limited to first-time house buyers.
  • Bank Simpanan Nasional and Bank Rakyat to offer assistance packages at 4% for homes costing RM35,000 under the People's Housing Projects or PR1MA.

Human resources
  • 30% of levy contributed to the Human Resources Development Fund will be used to improve workers' skills and competency, including for those retrenched.
  • Government to continue fine-tuning foreign worker management system. Foreign workers' levy will be clustered into two categories but will not include domestic helpers.
  • To implement a relocation and rehiring programme for undocumented workers so that they can get valid work permits.
Datuk Seri Najib Razak addresses senior government officials in Putrajaya today to announce changes to Budget 2016. – The Malaysian Insider pic by Afif Abd Halim, January 28, 2016.Datuk Seri Najib Razak addresses senior government officials in Putrajaya today to announce changes to Budget 2016. – The Malaysian Insider pic by Afif Abd Halim, January 28, 2016.Improving revenue collection
  • Government to increase action against tax evaders; late-filing penalties to be reduced.
  •  
  • Sale of alcohol and cigarettes on tax-free islands to be limited to licensed, tax-free stores, in order to reduce leakage of up to RM1 billion in revenue.
  •  
  • Tighten taxes on exemptions for imported vehicles on tax-free islands.
  •  
  •  
  •  
  •  
  • Optimise revenue from telecommunications by redistributing bidding processes.
  • Develop government-owned strategic areas through a bidding process. 
Development spending
  • Priority to be given to affordable housing, hospitals, schools, roads, public transportation and security.
  • Non-physical projects and projects that are still at planning stage will be postponed. This move is expected to save the government RM5 billion.
Civil service and government-linked companies
  • Government to keep its promise of July 1, 2016 additional salary increase for civil servants.
  • Government will not touch civil service emoluments and will not stop the services of contract staff in the public sector.
  • GLCs urged to reduce salary gap between top management and staff. This will be monitored by the Economic Planning Unit.
  • Government to keep its promise of July 1, 2016 additional salary increase for civil servants.
Education and scholarships
  • Government to continue the following four Public Service Department (JPA) scholarships for 2016:
1. The National Scholarship Programme (Program Biasiswa Nasional) will allow 20 top SPM-scorers to pursue their studies in universities abroad;
2. The Engineering Special Programme (Program Khas Kejuruteraan) for 200 students to pursue their studies in Germany, France, Korea and Japan;
3. The Bursary Programme (Program Lepasan Bursary) for 744 students to pursue their undergraduate degrees in public and private higher education institutions in the country; and
4. Scholarships for 8,000 students to pursue undergraduate degrees locally.
  • The National Higher Education Fund Loan (PTPTN) allocation of RM5 billion will remain.
  • Offers to enroll in MyMaster programme to increase by 15,000, MyPhd by 5,000 and IPTA (public universities) Academic Training Scheme by 300. Government to boost allocation by RM300 million.
  • MyBrain1 and the Bumiputera Academic Training Scheme will be continued. – January 28, 2016.
- See more at: http://www.themalaysianinsider.com/malaysia/article/revised-budget-2016-workers-epf-contributions-cut-3#sthash.eJOHhmP3.dpuf
 

Thursday, 28 January 2016 | MYT 12:11 PM

Najib presents revised 2016 Budget


PETALING JAYA: Prime Minister Datuk Seri Najib Tun Razak (pic) has announced a revised Budget 2016 to optimise the country's developmental and operational expenditures in the face of slower economic growth.
The revised budget will include precautionary and proactive measures in managing national revenue and expenditures, while ensuring that the well-being of the people remained a priority.
Najib said the recalibration is necessary due to a slump in global oil prices and a slower economic growth in the United States and China.
When Budget 2016 was unveiled in Parliament last October, the crude oil price was at US$48 (RM203) per barrel.
However, the current price per barrel stands at US$30 (RM127), a sharp fall since the Budget was presented.
Highlights
- The 2016 global economy expected to be more challenging and economic groweth expected to fall from 3.6% to 3.4%.
- Malaysia not alone in facing global economic challenges. Current crude oil price stands at US$31 (RM131) per barrel.
- Latest developments indicate that the global economy is at a very volatile stage and requires a proactive move to revise Budget 2016.
- We are not in a recession, neither are we in a technical recession.
- Eleven recalibrated measures announced.
- 1. EPF contributions by employees to be reduced by 3%. This is expected to increase private sector spending by RM8bil.
- 2. Tax relief of up to RM2,000 to those with income RM8,000 a month or lower. Two million taxpayers to benefit.
- 3. To reduce cost of living, Govt to liberalise APs for agricultural products including coffee beans and meats.
- 4. Domestic Trade, Cooperatives and Consumerism Ministry ordered to increase enforcement and action against unethical traders.
- 5. 30% of contributions to the human resource development fund to be utilised for skills training, including those who are unemployed.
- 6. MyBeras programme to be introduced until Dec 2016. Each hardcore poor family will be given 20kg of rice every month.
- 7. The Government will update the management system of foreign workers, with levies clustered into two categories, not including foreign maids.
- 8. Government will exercise prudent spending on supplies and services and to continue with grant rationalisation.
- 9. Development budget to focus on projects and programmes that place the people first, have high multiplier effect and reduce imports.
- 10. Development financial institutions and Government venture capital funds to increase allocations by RM6bil for benefit of start-ups and SMEs.
- 11. GLCs urged to implement initiatives to reduce the income gap between senior management and workers, to be monitored by the Economic Planning Unit.
Najib said Thursday's recalibrated budget was based on the approach of "shared responsibility" by certain segments of society.
He said lower-income groups will not be affected, and continue to benefit from measures such as the 1Malaysia People's Aid (BR1M).
"The present rate of the Goods and Services Tax (GST) will also be retained at 6%. The Government has no plans to increase this," said Najib at the Putrajaya International Convention Centre (PICC).
He also said that Malaysia would not resort to imposing capital controls and pegging the Ringgit, such as was done during the 1997-1998 financial crisis.
"The Government remains committed to maintaining the fiscal consolidation measures for 2016, which is to achieve a GDP target of 3.1%.
"Our country's debt will be reduced and will not exceed 55% of the GDP. The Government also has no plans to impose capital controls and peg the Ringgit," he said.
Najib also made mention of the Trans-Pacific Partnership Agreement (TPPA), which had been debated at a special Parliamentary sitting on Tuesday and Wednesday.
He provided assurances that with the signing of the free trade agreement, there would be no compromise on the country's sovereignty.
"The Bumiputera agenda remains intact. In fact, it is no longer a national agenda. With the TPPA, it has reached a global scale," he added. - Star, 28/1/2016