Saturday, 25 March 2017

Mohamed Rafick : Employment Insurance System (EIS)

Today PM announce the launch of EIS which was tauted as the safety net for workers against the risk of unemployment. Information on public domain suggest that employer and employee has to contribute to another scheme. This is the third scheme, after EPF and SOCSO. On the surface it looks good but the reality is the opposite. First impression suggest that the announcement is to bolster the PM popularity. In reality the scheme further reduces the narrow disposable income of wage earners and increase the cost of doing business for employers. Investors place considerable emphasis on the cost of doing business. The limited muscle power of domestic investors will have limited impact on new business and jobs creation. We need foreign investors to help the economy and create jobs. What EIS does is that further reduces Malaysia financial competitiveness against other regional countries. EIS intention is to give workers the protection that it needs if companies close down. Currently the labour law provides some protection for employees if they are being left in the lurch. Compensation based on certain formulas are given to employees if companies decide to ceased its business. Such compensation should give them temporary reprieve. What is observed is that the enforcement is lax and there is room for improvement of labour laws. Perhaps it is better to have a clause in the labour law that business that wants to shut down must give its employees a minimum pre-defined compensation. Unfortunately the government has chosen an unwise path. Instead of addressing the root cause of the problem, the government has took the easy way out by forcing the workforce to contribute. It is punishing the employees and employers to protect the interest of few people. It is chasing away foreign investors. Why isn’t the government themselves is not a party to the contribution. If the government truly believes in what they are doing, they should contribute the equal amount put in by the employer and employee. That would be fair. It will encourage companies to relocate. Sadly, today Malaysia has a national debt that close to MYR One trillion. Yesterday BNM release the numbers that reflect the financial health of the country which only shows that we are in a dire straits. GDP is about 4.5%, Malaysian household debt stands at 88.4% of the GDP, Total external debt to GDP is 73.9%. The population size in B40 is increasing. The number of BRIM receivers are increasing. Unemployment is on the rise. Fresh graduates are struggling. The numbers of people being part time and fulltime Uber drivers are also increasing. It is a case that government is giving more fish rather than creating environment for the people to fish. Sadly, all is not well. Our country leaders has failed us. The politicians on both sides are focussing on political value rather than doing the right thing for the country. It is time people with strong technical background and has the will power of doing the right thing to step up and lead this nation. For the sake of the country, please Dr. Mohamed Rafick

comment by Fauzi:

This insurance scheme is a washout
During the last recession in Ireland unemployed people were paid dole from the national insurance scheme. It ran into billions in the first year. Come second year the govt. had to reduce it; and jobs were offered to the unemployed; if it was not taken after the 3rd month the dole was reduced by 60%! And after that it was reduced by 80%! It creates complacency and laziness!
Do we want to go down that path? Especially our land is so fertile; tanam je hidup!
In Ireland they need something akin to that kalau tidak mati kesejukan