Sarawak MTUC: Help only deserving companies

Andrew Lo

KUCHING: Malaysian Trades Union Congress (MTUC) Sarawak secretary Andrew Lo has stressed the importance of the government ensuring that only deserving companies received assistance to mitigate the impact of Covid-19.

He noted that most employers and businesses were demanding for more government assistance to prevent them from going bankrupt, with some even urging the government to stop all assistance to workers and hoping for subsidies to be paid directly to employers.

“Some even want to force employees to go for two weeks or four weeks of unpaid leave and cut Employees Provident Fund (EPF) contributions to five percent for one year,” he said.

“Are things that bad, or is it an attempt to squeeze as much taxpayers’ money as possible?” he questioned.

He felt it was beyond comprehension to hear claims that a third of Malaysian companies would run out of cash by mid-April.

“It just shows that most owners of the businesses in Malaysia have been taking out cash even before accounts for the year are finalised,” he said in a statement yesterday.

Lo fully appreciated that businesses would be affected by Covid-19 and the movement control order (MCO), especially micro businesses, and recognised that the government had rightly provided some assistance.

However, he expressed regret over some of the ‘hyperbole and fear-mongering’ coming from employers’ groups.

He said businesses were now calling on the government to bail them out and subsidise up to 80 percent of wages and to cut EPF contribution rates to just five per cent.

“A lot of these businesses are employing the three million foreign workers. It is a travesty if Malaysian tax payers subsidise the salaries of the millions of foreign workers. Perhaps it is time to reduce the number of foreign workers,” he said.

He went on to give an example of a company operating a 50-room hotel in Sarawak, pointing out that the hotel sector was worst hit even prior to the MCO. “Revenue from March 15 onwards is zero, while January to March are about 45 percent down from 2019 figures.”

“Annual turnover of the hotel is about RM2.5mil and operating expenses are RM1.8-mln with a profit before tax and depreciation of RM700,000. Monthly operating surplus is about RM60,000,” said Lo.

He said the hotel had 20 employees, with staff salaries plus statutory contributions amounting to RM65,000 a month.

“The 14 days of no-pay leave would have saved the hotel only RM32,500,” he said.

He said that the current year accumulated operating surplus would be sufficient to pay salaries for three months even with zero revenue.