Thursday, June 4, 2015

Employers looking at cutting staff as GST starts to bite businesses

Assalamu Alaikum,

In the article below Bank Negara replies "but there has been growth." Yes 
there might have been growth in the same way huge increases in a country's wealth does not make the poverty stricken, millionaires. A 
quadrupling of the per capita income of a country does not change the 
rock bottom poor. In the same way growth does not translate into 
employment. Growth may even occur with a cut in employment.

It is about time the clever people running the economy dump the western model and start looking at the more humane economic model. The most important factor in an economy is not profits of organisation but jobs for its citizens. What is the joy of an 8% economic growth when we have half a million graduates unemployed and non graduates earning pittance at menial jobs. Is the problem with MAS the 20,000 humans about to be dumped? 

Why do we need GST? To increase the tax base? Would the country need to be taxed if the right to create money is taken away from the banks? Why do we allow these institutions to create money out of thin air and then lend it to people with interest? Isn't the money the govt need that is now being collected by GST. currently in the undue wealth of the bank owners? By what logic do you tax the suffering poor to preserve the wealth of the bank owners? 

This is the problem when we don't have confidence in ourselves and adopt everything from the West as the God given truth. We have the Manual given to us by the Creator but we cast it aside and search for solutions from elsewhere. We refuse to unlearn the untruths that has been drummed into our heads and we go on searching for solutions in blind darkness.


Employers looking at cutting staff as GST starts to bite businesses
Published: 4 June 2015 7:00 AM

From retail to hospitality to manufacturing, businesses are reporting lower sales and higher costs, says an employers' federation. Demand reportedly dropped after the GST went into effect on April 1. - The Malaysian Insider file pic, June 4, 2015.

Faced with falling sales and high operating costs, some Malaysian companies are considering cutting staff either through retrenchment or voluntary separation schemes, said an employers' federation.

Malaysian Employers Federation executive director Datuk Shamsuddin Bardan said about 20% of its members were looking into such options and they cut across all economic sectors from retail to hospitality to manufacturing.These companies have approached the MEF for advice and the federation's consultants were currently working with them on how to best cut costs and whether or not to lay off staff, said Shamsuddin.
Companies were finding it harder to meet overheads because of lower demand and consumption, especially after the 6% goods and services tax (GST) was introduced in April, he said."For some members, business is almost 30% down these past few months. So they are looking at either retrenchment or voluntary separation exercises," Shamsuddin told The Malaysian Insider.About 5,000 individual companies and 22 trade associations are members of the federation.

A May 2 StarBiz report quoted several associations and analysts who said they were seeing a slowdown of between 20% and 50% in business for retailers in the months after the GST.
Retail Group Malaysia (RGM), a consulting firm in the retail sector, expected sales to slow down for six months after April, the StarBiz report said.

Retail spending was expected to return to normal by year-end, the RGM was quoted as saying.

The Malaysian Trades Union Congress (MTUC), which represents blue collar private sector workers, however, disputed the reasons for laying off workers.

"According to a Bank Negara report, SMEs (small and medium enterprises) are still performing well," said MTUC secretary-general N. Gopal Kishnam.

Bank Negara's economic report for the first quarter of this year showed that business activity grew between 5.6% and 9.6% in all industrial sectors, except for agriculture.

The services sector grew by 6.4%, especially in consumption-related businesses while the manufacturing sector's 5.6% growth was driven by strong exports, particularly in the electronics and electrical cluster, the report said,

"The construction sector was supported mainly by the non-residential and residential sub-sectors, while the mining sector continued to record stronger growth amid higher crude oil production," BNM said.

Total economic growth, however, was 5.6% in the first quarter of 2015, down from 5.7% in the last quarter of 2014, and lower than the 6.3% recorded for the first quarter of 2014.

If staff reductions were needed, Gopal Kishnam said, employers should first start with foreign workers.

"SMEs are flooded with migrants, if there is a need (for retrenchment), repatriate them first and pay the balance of wages."- June 4, 2015.

"If you're not careful, the newspapers will have you hating the people who are being oppressed, and loving the people who are doing the oppressing."

― Malcolm X 

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