According to RAM Ratings, the current freeze on the hiring of foreign workers will largely affect the construction and plantation industries as these industries largely rely on foreign labours, reported The Sun Daily. “Even though the program rehiring of existing foreign workers may help for a short-term, new supplies are needed in a long run to replace those who have decided to return home. These industries will start to suffer if the freeze is extended further,” it said.
The rating agency did not expect the recent foreign labours levy hike to give much impact on this, as the hike was substantially lower than the amount that was initially proposed by the government in January 2016.
Initially, a hike of 10% increase in labour cost and 2% rise in overall cost was suggested. But the labour cost was increased by 5% and the overall cost was increased by 1%, half of what was suggested before.
In March 2016, the foreign workers levy was increased to RM1,850 per worker from RM1,250. At the moment, the government has announced that the freeze on hiring foreign workers will remain.
News Source: PropertyGuru