Workers busy harvesting bananas at Basir Ismail Estate in Kota Tinggi, Johor. Business operators hope levy for foreign workers will not be increased as this would affect their business.

JOHOR BARU: Business operators hope that the Government will not increase the levy for foreign workers in the upcoming Budget 2018 as the move could become counterproductive.

Johor South SME Association founding president Teh Kee Sin said the move would eventually weaken the country’s competitiveness and increase the cost of doing business for companies.

“It will also discourage foreign investors from investing in Malaysia and existing manufacturers might relocate their activities to other countries in the region with lower operating costs,” he said.

Teh said local employers were still dependent on foreign workers, especially for the 3D jobs (dirty, dangerous and difficult) as locals were not interested in such jobs.

He said the last increase in levy for foreign workers in the manufacturing sector, from RM1,200 to RM1,800 per person, was two years ago.

“If the levy is increased again in the coming budget, it might force companies, especially the SMEs, to hire illegal foreign workers as a way to cut costs,” added Teh.

He said going forward, Malaysia had no choice but to move away from labour-intensive to high-tech activities but that this would take time as this could not be done overnight.

Johor Baru Chinese Chamber of Commerce and Industry president Datuk Loh Liam Hiang concurred with Teh that SMEs needed time to automate.

However, he said there were certain sectors – such as fruit and vegetable farming, plantation and manufacturing – which still depended on manual labour.

“Farmers can use sprinklers to water their crops but they still need workers to harvest their vegetables or pluck their fruits,” said Loh.

He said many businesses in Johor Baru were having problems hiring locals as many graduates and school leavers preferred to work in Singapore due to higher income.

Loh said on the other hand, getting foreign workers was also not easy as most preferred to go to Japan, Dubai, Taiwan or South Korea.

“Malaysia is no longer as attractive to foreigners as it was before,” he said.

Johor Indian Muslim Entrepreneurs Association (Perusim) secretary Hussein Ibrahim said if the Government increased the levy, the 24-hour Indian Muslims restaurants would have to pass the cost to consumers or close down.

“Even a slight increase in food and drink prices might prove to be counterproductive as Malaysians are price sensitive,” he said.

Hussein said getting locals to work at the 24-hour Indian Muslim restaurants was hard as they preferred to work in fast food restaurants.

“We also prefer to hire south Indians as they speak Tamil and are easier to communicate with,” he said, adding that it was cheaper to hire south Indians compared to Indonesians.

Hussein said restaurant operators only have to spend about RM2,500 each on documents and approvals to employ them compared to RM5,000 to hire Indonesians.