FMM: Maintain electricity tariff, let Socso handle EIS funds

PETALING JAYA: The Federation of Malaysian Manufacturers (FMM) is urging the government to maintain electricity tariffs until Dec 31, 2020 and accord the Social Security Organisation (Socso) with the responsibility of managing funds collected under the Employment Insurance System (EIS), which is now under review.
Last week, Gas Malaysia Bhd announced that the average effective natural gas tariff for the non-power sector in Peninsular Malaysia will be increased by 17 sen or 0.5% to RM32.69/MMBtu for the period of July 1 to Dec 31, 2018 from RM32.52/MMBtu for the period of Jan 1 to June 30, 2018. The move has kindled concerns that electricity tariff rates will be hiked.
“While FMM is steadfast in its commitment towards energy subsidy rationalisation and although the 0.5% increase is lower than the previous period’s 22.97%, it is nevertheless still an increase in energy costs,” it said in a statement today.
Following that, FMM hopes that the new government will uphold the past Cabinet’s decision, announced on December 26, 2017, to maintain current electricity tariff rates in Peninsular Malaysia for Jan 1, 2018 up to Dec 31, 2020, in a bid to help relieve the energy cost burden on the manufacturing sector as well as to benefit the rakyat as household consumers.
FMM is also calling on the government to hold on to the Incentive Based Regulation (IBR) through the Imbalance Cost Pass Through (ICPT) until 2020, to help sustain the competitiveness of businesses, especially SMEs, without further increases in energy costs.
In a separate statement, the FMM welcomed the government’s move to review the EIS calling the current model neither balanced nor equitable.
It explained that the scope for the scheme is too wide and it should only cover those retrenched because of business failure and not due to downsizing.
FMM said allowing workers to have both employment termination and lay-off benefits under the Employment Act, including those who are in voluntary separation and mutual separation schemes – is against the principle of social security.
It noted that employers and employees contributing to the EIS are also very concerned over the management of the fund as poor management and unwarranted expenditure will lead to unjustified increases in the contribution rate.
FMM is of the view that the EIS should be managed by the Social Security Organisation (Socso), especially since the contributors are the same group of persons.
“FMM understands that Socso is in the process of adjusting its system to allow employers to make a single payment for both the SOCSO and EIS funds by end of 2018. The exercise should be widened to include single management of funds but with separate accounts to ensure transparency in the disbursement and management of funds.”