Increasing Productivity, Diversifying Domestic Portfolio To Reduce Deficit In Workers’ Compensation Account

KUALA LUMPUR, Oct 16 (Bernama) -- The government is taking steps to diversify the domestic economic portfolio to reduce the deficit in the workers' compensation account, said the Ministry of Finance (MoF).

This effort is believed to contribute to the attraction of investment towards creating industries and activities with high added value and quality across all domestic sectors which in turn provide more opportunities for expertise and increase local employment.

The government is also confident that through efforts to increase worker productivity through capacity building, it can meet the needs of industry while encouraging the adoption of digitisation and automation, according to the ministry through a written reply posted on the parliament website today.

The MoF was replying to Onn Abu Bakar's (PH-Batu Pahat) question regarding measures to reduce the deficit of the balance of payments income account, particularly the workers' compensation component following the repatriation of foreign workers' income and the low contribution of Malaysians working abroad.

According to him, the workers' compensation account has been in deficit for decades due to consistently higher outflows.

The outflow of money in workers' compensation accounts, i.e. wages and other benefits earned by foreign nationals working in Malaysia, increased to RM14.5 billion in 2022 and RM15.9 billion in 2023.

The increase in payment reflects the domestic activity that has returned to a brisk pace, contributing to job opportunities and an increase in workers' compensation.

The inflow of workers' compensation accounts, i.e. salaries and other benefits earned by Malaysians working abroad, increased by RM7.8 billion in 2023.

In the first half of 2024, receipts in workers' compensation accounts recorded RM3.8 billion.

-- BERNAMA