KUALA LUMPUR: The government is open to considering the use of foreign-worker levy collections to help businesses fund mechanisation and productivity improvements as Malaysia seeks to reduce its reliance on foreign labour, Treasury secretary-general Tan Sri Johan Mahmood Merican said.
He said channelling part of the collections back to businesses could be one approach to support the government’s efforts to reduce dependence on foreign workers.
“This is not something in principle that we’re not open to looking at, and certainly it could be something that, as the government is going to try to reduce the dependence on foreign workers, this could be an approach that can be taken,” he said at a post-Budget 2027 briefing hosted by the Malaysian Economic Association (MEA) today.
Johan said similar proposals had previously been raised when the government considered increasing foreign-worker levies, with suggestions that additional collections could be used to finance mechanisation and related initiatives.
“Especially when at one point we’re looking at higher foreign-worker levies, there were suggestions that the incremental amount would probably become the fund and be used to basically finance mechanisation and the likes,” he said.
The approach could help businesses invest in technology and improve productivity, while supporting the government’s broader efforts to reduce structural dependence on foreign labour.
Under Budget 2027, the minimum wage is scheduled to rise to RM2,000 from June 2027, with larger companies implementing the increase first while micro, small and medium enterprises are given more time to adjust.