Give tax breaks to prevent layoffs in other industries too - MEF

The Malaysian Employers Federation hopes the government will not limit tax exemptions for preventing layoffs to the media industry.

MEF executive director Shamsuddin Bardan (photo, above) said this was because retrenching workers would incur a high cost compared to preventing the layoff in the first place through measures such as tax exemptions.

“We see that if an employer retrenches its workers, that’s a costly endeavour because we’d have to let go of seasoned workers.

“And when the economy improves and we wish to hire more workers, we’d have to take new employees and train them again. This will surely incur a higher cost.

“So, why don’t we have such incentives to prevent retrenchment? And when the economy improves, we can fully meet the wishes of retirees then,” he told Malaysiakini when contacted today.

Shamsuddin was responding to Finance Minister Lim Guan Eng’s offer of tax breaks to media companies yesterday, on the condition that the companies take every possible measure to avoid retrenching its employees.

“We don't interfere in the marketplace, but I had a meeting with the corporate bosses of media companies last week, (and) they were basically asking about some tax measures and some tax exemptions.

“Even though we may have our differences, we were very receptive.

“I said in the event we give them tax exemptions, we want them to give us assurances that they will take every step possible not to retrench media employees.

"No matter our differences, we want to argue based on facts. Let's argue it out. We do not want to see any loss of jobs,” he said, following reports that Media Prima Bhd would layoff 543 staff members in March next year.

In October, Utusan Malaysia and Kosmo! had also terminated their operations due to financial difficulties.

Shamsuddin, meanwhile, said tax exemptions would be an effective measure, although it would take time to bear fruit given current economic conditions.

“I think this is ultimately a win-win scheme for both employers and employees. It should be expanded to other industries.

“We have actually proposed this a long time ago, but it is only being taken up by the government now,” he said.

Looking ahead, Shamsuddin predicted that the trend for layoffs for 2020 would be unchanged compared to this year, where it is focused on the manufacturing and services industries.

“The services industry has been actively introducing automation, online operations and artificial intelligence while the banking sector has also seen may layoffs as companies continue to introduce automation.

“We know when we digitise an operation and rely more on online transactions, they won’t need as many workers.

“Likewise, the manufacturing industry will have a hard time because the cost of goods is rising and Malaysia cannot compete with other countries that are more successful in lowering their costs,” he said.

Previously on Nov 4, Human Resources Minister M Kula Segaran had told the Dewan Rakyat that the private sector had terminated 24,600 workers from 2018 up to Sept 30 this year.

Of the total, he said 21,625 were ordinary terminations while 2,975 workers were involved in voluntary separation schemes.

He said 7,944 people were terminated in the manufacturing sector; 7,309 in administrative and support services sector; 2,123 in trading, distribution, and retail sector; 1,748 in the financial services and insurance sector; 1,049 in the hospitality, food, and beverages sector, and 679 in the information and communications sector. - Mkini