Your Rights: Objections to Kuala Lumpur City Hall Proposed New Assessment Rate Hike!

Rising assessment rates and your rights

Zero engagement, public relations exercise non-existent

THE simple, routine exercise of a property revaluation in the city of Kuala Lumpur has somehow turned controversial due to the lack of apparent justification, given the magnitude of the increase and scarcity of explanation.

Perhaps, the people in Government think there is no need for some form of elementary public relations and that having power is enough. There was practically no public engagement, consultation or attempt to seek feedback from stakeholders.

If such a simple task as revaluing the properties in Kuala Lumpur cannot be carried out diligently and in a responsible manner, I am concerned with the impending introduction of the more complex goods and services tax (GST). Will the levy and collection of the GST be properly handled?

The National House Buyers Association (HBA) is dismayed with the unilateral and arbitrary proposal by the Kuala Lumpur City Hall (DBKL) to increase the revaluation of properties in Kuala Lumpur for both private and commercial properties. It is not that DBKL cannot exercise the process of revaluation under the Local Government Act, but the issue is that it is “simply doing it”, literally speaking. The media has widely reported that the increase could range between 70% and 300% in certain areas.

The reasons given by DBKL for the increase as reported in the media are as follows:

(i) the last increase was more than 20 years ago; and

(ii)property prices have increased in value.

HBA would like to highlight certain pertinent issues which should be taken into consideration.

(i) Most private properties are owner-occupied

A majority of private homes in Kuala Lumpur are owner occupied, and many are retirees and pensioners.

Based on this logic, regardless of the increase in the market value of the said property, the owner does not reap any benefit as he is still living in the said property. It would, thus, be unfair to penalise the owner for the increase in property prices when he has not enjoyed any such benefit arising from the continuous ownership.

The owner would only be able to enjoy any increase in property prices when he decides to sell the said property to a third party. To say that property owners should be thankful to DBKL for affixing a high valuation on the property because property owners would be able to sell their property at a higher market value is preposterous. Assessment is based on market rental and not vice versa.

(ii) Many private homes are long-term investments

Many individuals use private homes as long-term investment to fund post-retirement needs or their children’s education expenses. It would be very burdensome to these people who have managed to save enough to acquire a second private home as a long-term investment as the returns from such an investment are just barely enough to cover expenses of the property itself such as this savage increase of rates proposed by DBKL.

(iii) An increase in assessment rates does not translate into better services

Would such a revision commensurate with the quality of services to be provided by DBKL in justifying such an increment? Currently, it would seem that there is no discernible improvement in either service or facility. It is only reasonable to expect a 300% increase in the level of service quality if DBKL is going to increase the assessment rates by up to 300%.

For DBKL to increase assessment rates without promising an equal increase in the level of service quality is morally wrong and akin to snatching candy from a baby; the culprit merely snatches the candy away knowing that the baby cannot fight back.

(iv) Poor planning and indiscriminate approvals

Poor planning and indiscriminate approvals granted by DBKL to new developments without indepth studies on the impact to the surrounding environment, especially existing housing estates, have overloaded the existing infrastructure. The servicing highways, byways and main carriageways today have excessive volume of traffic that was not catered for originally. This has resulted in long crawls at peak hours in many places.

In certain neighbourhoods, the communities are plagued by haphazard parking along the road reserves due to lack of enforcement.

(v) Against the Government’s aspiration to help the rakyat

Our honourable Prime Minister has decided to lower the personal income tax rates to lighten the burden of the rakyat in view of the impending GST. DBKL’s move to increase the assessment rates by such a high rate will be burdensome to the rakyat and goes against the very grain of our PM’s wishes to lighten the rakyat’s burden.

HBA does recognise the fact that there are speculators who may have amassed multiple properties. However, an increase in assessment rates will only penalise the majority of private home-owners who only own one or perhaps two properties. HBA had in the past proposed a higher real property gains tax (RPGT) and stamp duty for the transfer of properties to be imposed on such speculators who had amassed numerous properties. The measures announced in Budget 2014 by our Prime Minister and the recent strict lending guidelines imposed by Bank Negara have, to a certain degree, curbed and muted such unhealthy manipulation of property prices. The effects can be seen in the recent announcement by the National Property Information Centre or Napic under the Valuation & Property Services Department data “that the property market is expected to see slower growth this year (2013), as there will be an adjustment in terms of prices, which is expected to moderate”.

This, in turn, brings us to the question: “Does this mean that DBKL will undertake another round of revaluation for a subsequent corresponding reduction following the announcement?”

Advice to taxpayers

HBA urges DBKL to reconsider its decision to increase assessment rates for private homes in Kuala Lumpur based on the above-mentioned points. If DBKL wishes to increase the assessment rates for private homes and commercial properties to cover the increase in operating costs, then HBA proposes an increase of not more than 10% of the current tax.

Although the Mayor and Federal Territory Minister have assured the people of a possible reduction as they understood the taxpayers’ plight and hardship, the ‘Notice of Revision of the Valuation List’ under Section 141 of the Local Government Act, 1976 (LGA) was sent out. Why is this so?

To the taxpayers, let’s comply with the law and its due process by filing our ‘Notis Bantahan’ (NOT LATER than Dec 17) pursuant to Section 142 of the LGA rather than be caught in a situation of ‘by default’ or Mr Mayor and Mr Minister using the usual “there were only a handful of official written objections” rhetoric. The objection letters are absolutely necessary.

We have prepared three templates as a guide to object against the proposed hike, which can be uploaded from our website at www.hba.org.my. The templates are merely guidelines to facilitate the process. You are at the liberty to improvise the drafts as well as seek independent professional advice if in doubt.

An excerpt of Section 142 of the Local Government Act, 1976 (LGA) has been reproduced below for taxpayers to understand:

Section 142: Objections.

·Any person aggrieved on any  of the following grounds:

(a) that any holding for which he is rateable is valued beyond its rateable value;

(b) that any holding valued is not rateable;

(c) that any person who, or any holding which, ought to be included in the Valuation List is omitted there from;

(d) that any holding is valued below its rateable value; or

(e) that any holding, or holdings, which have been jointly or separately valued ought to be valued otherwise, may make an objection in writing to the local authority at any time not less than fourteen days before the time fixed for the revision of the Valuation List.

·All objections shall be enquired into and the persons making them shall at such enquiry be allowed an opportunity to be heard either in person or by an authorised agent.

I would like to come clean and declare that I am a rate-payer and have a vested interest in challenging the proposed rate hike by DBKL.

Go ahead, flood DBKL with letters of objection.

Questioning DBKL’s move on KLites

Justifying the proposed assessment rate hike

THE media has reported that two former mayors – Tan Sri Ahmad Fuad Ismail and Tan Sri Elyas Omar – have questioned the Kuala Lumpur City Hall (DBKL) on its proposed assessment rate hike.

Ahmad Fuad, predecessor to the current mayor Datuk Seri Ahmad Phesal Talib, pointed out that he had raised reserves amounting to RM3bil prior to retiring last year.

This means Ahmad Phesal inherited RM3bil when he took over.

Ahmad Fuad reportedly said that DBKL must provide a detailed budget for 2014, with a breakdown of how much money was needed and how it would be spent.

Elyas, meanwhile, noted that DBKL had “bigger revenue compared to what it had 30 years ago”, adding that there was no need to increase rates “even by 10%”.

DBKL must be selective and make a distinction between residential and commercial properties. Perhaps that should be done first before it imposes new rates on new commercial, residential and mixed development projects. After all, pricing is reflective of current valuations and there are so many new developments: stratified and landed, high-end residential condo, commercial retail blocks, office blocks, shopping complexes, SoFo, SoHo, condotel, hotels, serviced apartments and boutique buildings.

The issue of not having enough money should not arise. As plot ratios and density have been increased for developers in KL, more revenue in terms of development charges levied and assessment revenue would be collected. DBKL has also been collecting Caruman ISF or the Infrastructure Service Fund in the millions from developers for the development of infrastructure in KL and millions in lieu of the non-availability of car park bays. The host of projects under way driven by the Economic Transformation Programme, namely, the Tun Razak Exchange, Menara Warisan Merdeka (a 100-storey building next to Stadium Negara), the Kuala Lumpur Metropolis, KL Eco City, the Bukit Bintang Commercial Centre and Bandar Malaysia, the MRT and all the other abbreviations that I cannot remember are, therefore, a boon to it.

The excuse by DBKL that “the last increase was more than 20 years ago” does not hold water because some “newly” completed properties delivered four to five years ago had suffered the fate of a revision with an increase of 100%-200%, as though the properties had doubled in value within that short span of time.

Some owners in Cheras have received notices of revision that translate into a 200% hike in rates. Did DBKL take into consideration that the leasehold land upon which the property is erected expires in 60 years? The property value on resale would obviously fetch a lower price based on the diminishing lease period.

A rebate should instead be offered to those living in stratified properties like flats, apartments and condominiums, as they are already paying maintenance fees to their joint management bodies (JMBs) and management committees (MCs) for the upkeep of their infrastructure and playgrounds, maintenance of trees and grass-cutting, sweeping, cleaning (internal roads and drains) and rubbish disposal within their perimeters. The JMBs and MCs maintain the building, playground, parking lots and other facilities, while DBKL’s role is limited to cleaning the drains and maintaining roads outside the perimeters.

Previously, DBKL’s duties covered sewerage services, but today taxpayers have to make separate payments to Indah Water Konsortium. Shouldn’t this issue be taken into consideration for a reduction? While writing this article, my fellow National House Buyers Association (HBA) volunteers are scrutinising the past Auditor-General’s Report on the alleged excesses and wastages of DBKL.

DBKL’s sources of non-rate revenue

DBKL does not depend on assessment collection alone for revenue. There are other major sources of revenue, which we term as non-rate revenue which inter-alia are:
1. Licensing and permits from:

•         Engineering Department
•         Department of Buildings
•         Licensing Department
•         Department of Health
•         Department of Environment
•         Department of Enforcement

2.        Sales proceeds from DBKL properties;
3.        Interest on fixed deposits;
4.        Rent proceeds from council homes;
5.        Dividends from investments;
6.        Returns on investments;
7.        Compound and fine collection;
8.        Infrastructure contributions;
9.        Remittance from federal agencies;
10.        Privatisation of buildings;
11.        Parking collections;
12.        Sales of plans;
13.     Billboard erection fees and rent proceeds;
14.        Joint-venture (JV) housing projects, and many more.

It seems that there is more than RM300mil of “collectables” that DBKL has not collected from defaulting taxpayers. This, in turn, brings us to the questions: Why not?

DBKL must only venture into value-for-money projects. There were even a few JVs with private developers for housing and commercial developments that were abandoned, with buyers being left in the lurch for years. Does DBKL practise an open tender policy for all its projects and procurements?

DBKL has ventured into various projects with private developers to generate income in Wangsa Maju. The roads, drainage system, sewerage system, water pipe lines and electric and telephones cables in the area were all done without DBKL spending a single sen. Therefore, there are other ways to obtain funds rather than placing the burden on KLites with this assessment rate hike.

Development expenditure is largely funded by the Federal Government. For 2013, from what I understand, DBKL expects to receive RM414.7mil worth of Federal Government funding, RM300.5mil of Federal Government allocation under the 10th Malaysia Plan and RM114.2mil from government grants.

Declaration by DBKL 

DBKL’s upper management must come clean to declare that they have not been selective and biased in their choice of property location revaluations. The upper management, the Federal Territories (FT) Minister, mayor and the entire City Hall advisory board members must declare that their annual rent rates too have been revalued in the current exercise. They must declare their respective quantums of increase based on two premises:

(i) the last increase was more than 20 years ago; and
(ii) property prices have increased in value.

What was the methodology used to compute the new rates? Show us how DBKL’s current revenue is insufficient to meet its expenses, when the mayor had stated in his budget speech in December 2012 that “DBKL is already operating on an estimated surplus of RM217.7mil”. Among the aspects of success is the increase in total revenue of RM241mil to RM1.69bil from the previous year. It should also show why its non-rate revenue is insufficient and why its reserves are insufficient. If DBKL cannot do that, then it simply cannot increase the rates revenue by a revaluation of annual rental. If the revaluation exercise is adopted, it is irrational to impose the same percentage of levy, ie, 6% for residential, 10% for land and 12% for commercial premises. It cannot apply the same percentage across the board.

There must be a policy change by reducing the chargeable rates to, say, 2% for residential, 3% for land and 4% for commercial.

This does not mean that DBKL need not revisit their valuation exercise that has been found wanting by taxpayers.

The astronomical valuation based on valued rent, amount and quantum are simply preposterous.

In fact, the FT Minister’s statement “that the assessment is based on property value” is wrong. Property assessment is based on rental value. A hypothetical rental value is placed on the property and this is “multiplied by 12” to obtain the annual value. What if there is no rent? What if the yearly rental collected is not what DBKL had estimated? Has a concise survey on annual rent collected by the taxpayer been matched with a declaration of income collected from rent in the taxpayer’s declaration to Lembaga Hasil Dalam Negeri vide the stamping duty on tenancy agreements? What if there is no contract of tenancy and the premises are rented out on a weekly basis? Perhaps, there should only be a revaluation of properties that are converted from housing to commercial and those which have undergone major renovation from single-storey to double-storey units or the like, thus increasing their build-up and useable areas.

By the way, isn’t the Federal Territory of Putrajaya due to undergo a revaluation?

Complaints galore

The proposed assessment rate hike by DBKL has understandably irked the city’s dwellers, as the list of complaints against the standard of service being delivered by it is rather long. Among the grievances are roads riddled with potholes, untrimmed trees, unkempt and unsightly public parks, undergrowth on road reserves, inconsistent rubbish collection, broken drains, poor upkeep of playgrounds, flooding, parking woes, uneven roads, a spike in dengue fever, illegal dump sites, infestation of rats, illegals and beggarsillegal buntings and billboards, poor or lack of enforcement, failure to collect rent from Council Home defaulters, lack of maintenance of public lightings ... and the list goes on and on.

By the way, has the KL Draft Local Structure Plan that was flooded with voluminous objections from land proprietors, occupiers and vested parties been finalised and gazetted?

Taking the legal option

“Sue them” is what the lawyers would advise. As a last resort, that seems to be the proper thing to do.

Perhaps, we should galvanise a group of ‘pro bono’ lawyers (lawyers doing public good without fees) to commence a Public Interest Litigation in the Courts against the Mayor, DBKL and the entire City Council Board: http://www.dbkl.gov.my/index.php?option=com_content&view=article&id=41&Itemid=724&lang=en for the sake of transparency and accountability. Let’s also organise a group of experts to conduct a forensic audit on DBKL with regards to its operating expenditures and efficiency, emoluments and overtime expenses. Lets’ unearth how DBKL, assisted by its Board of Advisors, has spent taxpayers’ money for the past 10 years and its vision (how they intend to use our money) for the next 10 years. DBKL should open up its budget to public scrutiny to justify how additional money derived from the rates will be used to provide better services to KLites. Don’t tell me that the very people who pay taxes to DBKL are not able to scrutunise DBKL’s spending?

I would like to highlight the following:

“Councils spend public money. The money comes from national and local taxes – as well as charges to users of services. Councils have a special responsibility to tell local residents and taxpayers how they spend your money. They do that by publishing yearly accounts and details of their spending.

“Council accounts are the financial statements that most organisations have to produce at the end of the year – a balance sheet and summary of income and expenditure. But the term also covers all related documents used to make up the council’s accounts and any report by the external auditor about how the council organises itself to conduct its business.

“As a local resident, or interested party, you have legal rights which let you inspect your council’s accounts and related documents, ask questions about the accounts, and object to them.”

- Preamble in Council accounts: A guide to your rights published by the UK Audit Commission

Contributed by Chang Kim Loong, AMN, is the honorary secretary-general of the National House Buyers Association (HBA): www.hba.org.my. 

Advice to Taxpayers
P/S: For those who have not lodged their ‘Notice Bantahan’ pursuant to Section 142 of the Local Government Act, 1976, please do so, not later than Dec 17, as otherwise, you may be deemed as having accepted the revaluation ‘by default’.

You may choose to adopt any of the three templates as a guide for objections against the DBKL hike, which can be uploaded from our website at: www.hba.org.my.

Malaysia needs to produce more houses to achieve 20/20 by 2020

KL to rank 20th Most Competitive and 20th Most Livable City by 2020

AS I walked the streets in Melbourne, people are either taking pleasure in their daily activities or catching up with their friends. More importantly, they are enjoying an abundance of economic and lifestyle opportunities, supported by their affordable housing prices and convenient transportation. It comes as no surprise that the city has been ranked as the world most livable city by The Economist for years.

Melbourne tops the list as the most livable location, according to a survey of 140 cities conducted by the Economist Intelligence Unit (EIU).

For Malaysians, the good news is, Kuala Lumpur ranked second in South-East Asia after Singapore on the same list, while the challenging part is we were at No. 77 in the world ranking, according to the survey last year.

In terms of competitiveness, the World Economic Forum (WEF) has ranked Malaysia as the 24th most competitive nation among 148 countries in its Global Competitiveness Report 2013-2014. Under the Economic Transformation Programme (ETP), the Government aspires to elevate Kuala Lumpur to be the top 20 most economically dynamic cities and top 20 most livable cities by 2020.

To realise these goals, we need to gear up our efforts in building both the hard and soft infrastructure of the country. And if we are to be a truly developed nation, one of the most critical criteria is to have more homes, as the nation’s housing needs must first be addressed to ensure quality living.

Let’s take a look at how developed nations house their people. Take Australia as an example, where four of its cities, i.e. Melbourne, Adelaide, Sydney and Perth, ranked in the top 10 most livable cities as measured by the Global Liveability Survey in 2012. Australia has a population of around 22 million living in 9.1 million homes, according to its census in 2011, which means their average person per household is 2.5.

Another developed nation in Europe, United Kingdom, has a population of 62.7 million people and number of homes is approximately 25 million, which also works out to have an average of 2.5 persons per household.

In Malaysia, while our population is about 28 million, we only have about 4.6 million homes, according to National Property Information Centre. This is equal to 6.08 persons per household. For us to catch up with Australia and United Kingdom which have an average of 2.5 persons in a household, we would require a total of 11.3 million homes in our country, which is a 250% increase from what we have currently!

However, at our current housing production of about 100,000 homes a year, it would take us 67 years to catch up with the benchmark displayed by these developed nations, assuming there is no additional increase in population.

The statistic above paints a picture of the fundamental required for a developed nation. As a developing nation, the Government and the relevant private sectors need to find ways to grow the number of homes in Malaysia. We are in need of more housing especially when the Government aims to move our country towards developed nation, and to grow the population of Greater KL from 6 million people to 10 million by the year 2020, which would put further pressure on the housing market in urban areas.

Currently, production has not been able to keep up with demand and this has pushed up housing prices. Having ample supply is the only long-term sustainable way to keep housing affordable. The Government needs to streamline the delivery system to increase the number of homes built every year, instead of stifling the supply which also include the cooling off measures which may eventually lead to higher prices due to inadequate supply.

Imagine if we are having 11.6 million houses today instead of 4.6 million, our house prices would be more affordable due to ample supply. The bottom line is we need more houses, especially affordable houses. It will help in the long run if the authorities can find ways to encourage housing supply, and this include putting off cooling measures on the property industry which only work in the short run as shared in my last article “Cooling Off Measures Choke Supply”.

More production of houses will make prices more affordable. And, if the Government can further support the housing needs with infrastructure including having a good public transportation system, the aspirations of making Kuala Lumpur the top 20 most livable and most competitive cities in the world can become a reality by 2020.

FOOD FOR THOUGHT BY ALAN HONG KOK MAU
FIABCI Asia Pacific chairman DATUK ALAN TONG has over 50 years of experience in property development. He was FIABCI World president in 2005/06 and was named Property Man of The Year 2010. He is also the group chairman of Bukit Kiara Properties.

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Malaysia's property market still growing strongly

Malaysia's property market still has much room to grow and will benefit from the high property prices in Singapore, said founder and principal trainer of Singapore-based School of Infinite Potential, Kenny Tan (pix).

"Malaysia('s property market) still has much growth. The market here is exciting and there is a lot of potential and resources. Malaysia can become a really solid country with its hardworking people," he told SunBiz in an interview.

Tan, who is also ERA Realty Network Pte Ltd group division director and a practising real estate agent, said property prices in Singapore have driven buyers to Malaysia due to its closeness in terms of proximity and culture.

"A lot of Singaporeans buy their second home or investment properties here. There is a lot of interest here, especially in Iskandar Malaysia (Johor). There is a lot of interest from Singaporeans, but we always advise them to do research prior to investing," he said.

Tan said while Singapore's property market has gone through a few rounds of corrections, property prices in Kuala Lumpur have been constantly rising since 2004.

Although the issues in Europe and the US have resulted in expatriates pulling out and weakening the rental market, there has been a good influx of foreign interest from South Korea and Japan.

"There is still a lot of opportunities for real estate agents in this segment," he added.

Meanwhile, the cooling measures introduced by the Singapore government has also helped attract interest to Malaysia, with Malaysian property developers taking the opportunity to ramp up their marketing efforts in Singapore.

However, there is still strong demand in Singapore's properties despite the cooling measures, especially from Chinese investors, said Tan.

"(It's just that Singaporean) investors are now taking their time to buy instead of rushing in and chasing prices. There are still transactions (in Singapore properties)," he added.

On property buying trends in Malaysia, Tan said it is moving towards online buying, selling and marketing.

"Technology provides convenience and productivity, one can search for properties online at any time and anywhere. This is already happening in Singapore and we foresee that happening in Kuala Lumpur over the next two to three years.

"There is an evident trend that Malaysia is moving towards that direction with the various online forums and property portals," he said.

Tan said going online means buyers can do research before viewing properties or meeting up with agents, saving time and money. At the same time, real estate agents know the calls they get are more likely to be hot leads rather than cold calls.

"However, there is still a segment of buyers who still use newspapers to search for properties. For example, the older generation and those who are less internet-savvy.

"In Singapore, buyers who want to buy landed properties do not search online. There is still a certain type of buyer who like traditional media thus it is important to have both (mediums)," he added.

 By Eva Yeong  sunbiz@thesundaily.com

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Kuala Lumpur property market gains stronger Momentum

SINGAPORE, July 18 (Bernama) -- The Malaysian property market has gained stronger momentum after the May general election, which saw a turn-around in the investment market in the second quarter of the year, says DTZ Research.

In a research note titled, "Property Times Kuala Lumpur Q2 2013 - Greater Market Certainties After The Election", it said the turn around in the second quarter was driven by corporate purchases for occupational requirement despite concerns about overall oversupply in the market.

It said the overall office market was stable.

Both vacancy and rental rates remained unchanged with continued substantial supply in the pipeline.

The research house also said the anticipated oversupply sentiment did not appear to affect the market as activities remained resilient and active, supported by stable rental and capital values.

Retail sales remained buoyant with continued local and international interest for investments in the sector.

It said the high-end residential market resumed activities with several new launches during the quarter despite Bank Negara contemplating measures to curb speculation and lending.

"Now that the GE13 is over, companies are starting to proceed with major investments, which may have been temporarily held back by political uncertainties.

"We can expect stronger momentum in government-linked mega projects such as the Tun Razak Exchange (TRX) where third-party investors and developers have been invited to participate, DTZ Research added.

The total value of 12 deals recorded in the second quarter amounted to RM988.6 million compared with RM490.8 million, comprising three deals in the first quarter, mostly in the office sector.

-- BERNAMA

Malaysia lures for its Gen Y youths?

KUALA LUMPUR: Gen Y youths young people usually recognised for their savvy in communications, media, and digital technology will benefit from the Government's move to draw quality high-tech and knowledge-driven investments to the country.

International Trade and Industry Minister Datuk Seri Mustapa Mohamed said with the Government's emphasis on developing the 11.4 million youths who make up 46% of the nation, it was important for Gen Y workers to have access to companies with good training, exposure and salaries.

“The Government is adopting new methods by looking beyond hard FDI (foreign direct investment) numbers,” he said here yesterday.

“Services companies are becoming more crucial to our economy, and their presence in Malaysia is relevant to the young through their (the companies') job creation.”

Mustapa said the Government was not only giving out fiscal incentives, such as tax holidays and training grants, to attract quality investments, but had also liberalised 18 services sectors this year, to follow the 27 in 2009.

He said such measures had yielded “fruitful results” with companies like Service Source, test and design company National Instrument and computer multi-national Hewlett Packard, employing large numbers of Gen Y workers.

“Service Source, a recurring revenue management company, came to Malaysia in 2010 with only 27 people.

“Last June, it surpassed 550 staff the majority being graduates or diploma holders and more than half of them are below 30.

“National Instrument is another sterling example. It offers a salary scheme to graduates equivalent to that offered by some investment banks in Malaysia,” Mustapa added.

The Jeli MP emphasised that FDI was particularly relevant to Gen Y, as the creation of employment and knowledge spillover from foreign companies allowed youths to be exposed to new technologies and cutting-edge training schemes.

He said these companies offered competitive salary packages.

“This will increase their knowledge in the industry and improve their employability,” he said, giving the example of oilfield services corporation Halliburton, which sends fresh graduates to their training centre in the United States for up to 18 months to gain specialised knowledge.

However, Mustapa said, there were challenges to attracting such investments.

“Some companies are not willing to pay more for talent, and so might face a higher turnover rate.
“There is also competition for FDIs from countries that offer bigger incentives or huge domestic markets.

“However, Malaysia offers a value proposition as we have a sound infrastructure and legal system, investor-friendly policies, and a talent pool that will be able to complement investors.”

International Trade and Industry Minister Datuk Seri Mustapa Mohamed has been working hard to bring in investments that Gen Y can benefit from. 

In an interview, he talked about the government's approaches and challenges faced.
Excerpts from the interview:

>What do you think of the state of Malaysia's economy?

There lots of of challenges globally and regionally. Europe is still in some trouble, America is not out of the woods yet. India is going through a difficult period politically and economically as well - there was a time where India was very bullish. Although growth is still good there, it's not that good as a year and a half ago. China is still going strong. The bright spots will be ASEAN, Africa, the Middle East.

Against that backdrop, our performance has been quite credible, our economy is doing okay, steady growth that is higher than the world's average. Unemployment rate is low, inflation is manageable, we have an issue with the deficit which is being managed well by the govt. We have strong reserves. Our fundamentals are strong.

Some factors leading to Malaysia's relatively strong state of economy are the fiscal stimulus, the Economic Transformation Programme, our diversified economy, and robust customer spending.

>Do you think the youth population of Malaysia will benefit from our economy?

Yes, our employment opportunities will of course benefit mainly young people. Many come out from universities and expect to get a job, a good job. Some come out and do temporary work, which is useful - working in a hypermarket or petrol station, for example - these are very important stepping stones as they allow you to get some experience.

Our graduates are not as selective as before, they are prepared to accept these jobs to sustain them for a few years before moving on to a better-paying one. Gen Y represents a big percentage of the Malaysian population, and the Government is mindful of the fact that this is a volatile and dynamic component of the population.

The issue is quality employment. Graduates being paid RM2,000 is not true reflection of what they can contribute. Some companies are not paying their graduates too well, some graduates are accepting jobs which require lower qualifications and for that reason salaries are lower.

Job opportunities are plentiful, that's not an issue here. We have lots of job opportunities in Malaysia but the challenge for us in government is to generate more quality employment opportunities.

From anecdotal evidence, many graduates are not happy with the entry-level salaries. That's why Budget 2013 focuses a lot on young people, including measures such as the Graduate Employability Taskforce with an allocation of RM200mil. This isn't new, we have Talent Corp, we have collaborated with various institutions like Mida to help young people.

We also have the 1Malaysia Training Scheme Programme (SL1M), which will increase the employability of graduates through soft skills and on-the-job training in private companies.

From MITI's point of view, our job is to stimulate investment, both domestic direct investment and FDI. We have been working very hard.

In an average year, the companies approved by the Malaysian Investment Development Authority (Mida) will normally generate about 100,000 new job opportunities. The ETP over the next 10 years will generate 3.3 million jobs, that makes 330,000 a year. That's the kind of number we are looking at, and many of these jobs will b available to young people.

>Are we making steady progress towards this goal?

Definitely. There's a company out there, Service Source international - they started small here but when I saw them two weeks ago they had a headcount of more than 500. Their plans are to add more. This is a company of graduates, most of the staff are either diploma-holders or local graduates.

Service Source have also launched a Protg Programme in the company where many fresh graduates are given on the job training at an executive pay package.

Another of fruitful result, is a company in Penang called Agilent which has 2,800 people. 900 of them work in research and development.

In Iskandar you have Legoland, people who work in these places command high salaries.

Of course in sectors like banking and finance they will be well-paid, there has been good growth in Islamic banking and finance in the country. As Islamic finance in Malaysia grows, as the country becomes a hub for the region, there are more opportunities created for young people.

>Why are foreign direct investments relevant to the young, particularly to Gen Y?

The creation of employment - without jobs, our youth will not find an opportunity to improve their economic standing.

Panasonic, for example, employs 20,000 Malaysians as executives and also as blue-collar, factory workers.

The other reason is knowledge spillover as a result of forward or backward linkages with foreign companies possessing high technology that invest in Malaysia, our youth will be exposed to new technology on their job. This will increase their knowledge in the industry and improve their employability as they move further in the industry and perhaps opportunity for them to carry out their own business operations as a vendor to the foreign investor.

Halliburton, one of the world's largest providers of products and services to the energy industry, provide specified training to its fresh graduates from six to 18 months while they are on the job.

They also send these Malaysian fresh graduates to Halliburton Technical Training Centre in the United States. This is an example of how knowledge spillover from FDI can benefit our youth.

>What is the Government doing to attract quality investments? 

We are more focused now, more targeted. We can't compete with some of our neighbours in terms of wages, but where we can compete are the areas where companies require higher skills, productivity. We target companies that are high-tech, knowledge-intensive companies.

The Government is considering GNI creation of any project or investment while also using employment creation as a complementing tool to measure a “good investment”.

In giving out fiscal incentives such as tax holidays and training grants; the Government targets knowledge-driven, research and development based companies that budget a large amount on capital spend on technology per employee.

We have to look at the supply side as well, increase the supplies of trade and human capital.

The Government liberalized 27 services sectors in 2009 and a further 18 services sectors in 2012. The intention behind this is to drive foreign investments which can create quality, high-paying jobs.

While recording low investments, services companies are becoming more crucial to our economy and their presence in Malaysia is relevant to the young through their job creation.

>Have these approaches been fruitful?

Yes, along with companies I already told you about, there's National Instrument - another sterling example, a test-and-design company. NI Malaysia offers a salary scheme to graduates that is equivalent to the salary schemes offered by some of the investment banks in Malaysia.

More importantly, it has a unique internship programme formed in 2009. In 2012, they admitted around 30 graduates and these interns were trained in R&D and manufacturing as well as IT applications.

There is also Hewlett Packard, which has its Operation Headquarters for Asia-Pacific here. We gave them a tax holiday - one of the ways we are attracting investments, as you asked before.

>But how do you know these foreign companies will hire fresh graduates rather than someone who has already been in the workforce for a while?

Well, some companies do prefer to take people from other companies rather than train fresh graduates. There are different ways to do it, and some companies to tend to take the easier way out. But I feel they should invest in youth, employ them, train them. The companies must play a better role in training youth, it can't just be left to the Government.

I'll bring up SL1M again - we've found that our graduates become much more employable after learning these soft skills - they become more proactive, more aggressive, more forthcoming. The government is doing that, but we urge and strongly encourage companies to play a more active role and train its new recruits.

>Are there any challenges when it comes to attractive quality investment?

It's a chicken and egg issue - companies will come here if we have a large pool of skilled graduates and manpower, and that will bring in more investments as well. On the other hand, if the skills are not available then they will not come. We need to increase the supply of human capital.

Companies operate on cost factors and many companies that are interested in Malaysia are still looking at low cost factors in Malaysia. Some companies are not willing to pay more for talent.

There is also competition for FDIs, Singapore, Hong Kong and Taiwan offers bigger incentives and has very liberal policies while countries such as Thailand, Vietnam and Indonesia continue to offer a huge domestic market which interests investors.

However, I am convinced that Malaysia offers a value proposition as we have sound infrastructure and legal system, investor-friendly policies and a talent pool that will be able to complement investors.

>What are some of the challenges a company may face in recruiting Gen Y workers?

In general, those companies which offer lower salaries are not so good with attracting good people. Those which are willing to pay a little more have better luck.

>Do you think these companies would be more inclined to hire expats?

In general, bringing in expats costs money, and if you add up, it will almost certainly be more than what you pay a local.

>Would local graduates be making more if they took their skillset overseas?

If you factor in other costs - rent, transport, cost of car... We found that at the top level, the gap is not that wide. Malaysians earn a decent income. The problem is the entry rates at base levels, entry point salary is where the difference is.

Once Malaysians leave, it is harder for them to come back because they've made friends, settled down, become part of the community. If our entry level salary is low, and because of that people work overseas, it will become even more challenging to build this talent pool.

In my view, if companies have better entry-rate salaries, it will help to prevent brain drain, and also solve some problems companies have when hiring.

>Do you think that the development of our Gen Y will meet the Government's aspirations of attracting quality investments?

In a way, some of our measures are short-term. We need more medium and long-term solutions, for example, reform the education system. It needs to be more hands-on, so we've got some measures like the National Education Blueprint.

We also need to regularly change the curriculum in schools and universities. Malaysians have to develop a love for skills, fight to get a job.

I would like to relate to you a story of a young girl by the name of Nani Abdul Rahman. She is an alumni of Yayasan Khazanah, which I chair. She read Law at IIUM and in her penultimate year, she interned at Khazanah. Khazanah Nasional offered her a job as an analyst and after working for a few years, she got an offer to do her Masters in Jurisprudence at Harvard University. Today, she is a senior personnel at one of the biggest Islamic banks in the world.

I have complete trust in our Gen Y. They are very confident and well exposed generation.

>How do MNCs feel about local graduates? Do they prefer those who graduated from foreign universities, Ivy Leagues and similar?

Some of our local graduate are good, some are outstanding. Many of our top corporate figures were trained in this country. Not every top corporate guy studied overseas. I don't think companies have a preference, it does depend on the person.

If you're a foreign university graduate but you're quiet, timid, aloof - the company will not want to take you on. It is the qualities a person holds.

Companies are looking for a person who is outgoing, passionate, ready to learn, good work ethics... These characteristics can come from a local or foreign graduate.

>You hold the importance of education in very high regard. 

Yes - even within my community in Jeli, the constituency I am MP for, I focus on developing human capital.

I run and fund the Darul Falah programme, which provides free tuition for students between 10-12 every Friday and Saturday. The focus is on English, Maths and Science.

The centre actually operates out of my house in Kelantan, it started about 15 years ago. I also have three other centres which have been up and running for three years now.

It is important in a rural area like Jeli, the children get some exposure. There has been improvement, but I am still not happy with it.

The programme has expanded to offer free computer classes, we hold camps, essay writing competitions in both Malay and English - I give prizes to the winners.

Last year when I was in Perth for work I met a number of students and one of them, a JPA scholar, came to me. She said she was an alumni of Darul Falah. Her father was a customs officer who used to send her back and forth on a motorcycle to Darul Falah when she was 10.

She is now a scholar reading Commerce at the University of Western Australia and she aspires to be a Partner at PriceWaterhouseCoopers.

It's moments like those that underline my conviction that education is the best investment.

>Do you have any advice for Gen Y looking to make a living in Malaysia?

Be prepared to start small, meaning, accept any job and learn while doing it. Shine in your job, by which I mean outshine others.

Discipline and passion are very important qualities. You need to be disciplined. Work ethics, passion - in my view, these are qualities some graduates are lacking. Passion and commitment are important.

The technical knowledge you earned is important, of course, but so are passion, discipline and commitment.

By TASHNY SUKUMARAN tashny@thestar.com.my

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Malaysia's property market steady, demand not affected by global factors

KUALA LUMPUR: The property market may be affected by the global economic factors but local demand has not been dampened, according to some property developers.

Low Yat Group sales and marketing executive Sean Saw said there was interest among Malaysians especially the younger adults to purchase property although the economy may be holding some of them back.

“I gather that even though the property sector may be quieter due to external factors, but there are still transactions. Newly launched projects continue to be sold out, surprisingly,” he said after a briefing for exhibitors at the Star Property Fair 2012.


He added that the market for sub-sale may be slower but the overall market was expected to be back in full swing next year.

Saw said the fair would be a great avenue to raise awareness among homebuyers about Low Yat's high-end projects, especially its Tribeca serviced apartments to be launched this quarter.

LBS Bina Group Bhd's managing director Datuk Lim Hock San also concurred noted that despite the economic uncertainty, there was still demand in the local property market especially the affordable homes.

“This can be seen in our recently launched Royal Ivory double-storey double storey cluster link semi-detached development where over 300 units were fully sold in three months,” he said.

LBS which is participating again in the Star Property Fair after a hiatus last year said that it was back with exciting projects.

Senior public relations executive Cleosun Ng said after the first exhibitors' briefing: “It has been an exciting year for us. We have many projects to share with the homebuyers and this fair is the right platform for us.”

She added that the fair would serve as a branding channel for LBS to convey its lifestyle living range of products to the homebuyers.

Bukit Gambang Resort City developer Sentoria Group Bhd would also be exhibiting, promoting its investment development within the Bukit Gambang resort city that include commercial and residential projects.

Sales and marketing senior executive Cony Tan said that the fair would be a great ground for Sentoria to get more exposure and reach new customer as it used to only reach out to existing customers through its buyer-get-buyer scheme.

Bucking the trend: Exhibitors attending the briefing. Some property developers say newly launched projects continue to be sold out.

 

“All the while we invite existing customers to our events but since launching our villas, we are trying to market our products through different channels,” she said, adding that Sentoria has started participating in roadshows and exhibitions in the second half of the year.

“The customers who walk in to (the Star Property Fair) would be very potential buyers. There are good chances of growing our customer database and getting feedback on our products,” she said of what to expect at the fair.

The Star Property Fair, in its fourth year rolling, would be held from Nov 30 to Dec 2 at Kuala Lumpur Convention Centre.

By LIZ LEE lizlee@thestar.com.my

Malaysia's Tax Budget 2013: politically savvy for general election? Housebuyers may struggle to pay!

Beyond the statistics of Budget 2013, it is clear that the government is well aware that the middle income group has found itself in a sandwich position.

FOR some in the Malaysian middle class, especially those in the upper income bracket, there is not much to cheer about Budget 2013.

But this is a group that is not easy to please. If they have their way, they would want to have personal taxes reduced. I would want to pay less to the taxman too, but it is also about time that we wake up to the reality of having the consumption-based goods and services taxes (GST) implemented.

It may not be politically savvy to introduce the GST prior to the general election but the fact is the current tax base is simply too narrow. Just over a million people are now paying personal income tax in a country of over 27 million people.

Through the GST, the tax net would be wider and those who spend on more pricey items would just have to pay for them. An ordinary wage-earner buying economy rice or roti canai won’t have to pay GST, for sure.

But if you buy a Louis Vuitton bag in KL, then it’s only right that you pay a hefty GST bill, and help the government raise its tax revenue. If we want to encourage tourism, we just have to follow what other countries are doing – limiting GST only to our citizens. Tourists, even if they are rich sheikhs, can apply for tax refunds at the airport.

That’s how GST works, but there is a general election ahead. The government does not want to be in a defensive mode, where it has to explain how GST works.

We are always looking to pay less while we expect the government to spend more to boost the economy, or even give away monetary goodies to spur spending.

When the government spends, it has to look for money. Currency speculator George Soros is surely not a good option.

Reducing by one percentage point for those with chargeable income between RM2,500 and RM50,000, as proposed in the Budget, plus the other tax reliefs, also mean that only 1.7 million people will now pay taxes compared with the workforce of 12 million.

Beyond the statistics, it is clear that the government is well aware that the middle income group has found itself in a sandwich position. They are the ones who feel the rising cost of living the most, and any effort to reduce their tax burden should be lauded.

It is this group that the Budget wants to target. The rich can take care of themselves and the poor has been taken care of.

The higher income group would still benefit, in some way, as regardless of how much one earns, the existing tax relief for their children’s education has been increased to RM6,000 from RM4,000 per child.

But it is the financially distressed wage earners, especially those in the lower earning bracket, who are doing their best to stretch the ringgit. After paying for their home rentals, car or motorbike loans and food expenses, there is nothing left, really. Saving itself is difficult, let alone finding the downpayment for the first home.

The affordable houses scheme would be essential to allow this group of urbanites to believe that they can own houses. The government must make it work.

Another measure that is targeted at this group is the 50% discount on KTM fares for Malaysians earning RM3,000 and below monthly. I would have preferred the government to just provide a blanket free KTM ride during peak hours in the mornings and evenings.

I am curious to see how KTM plans to carry out the registration of commuters who qualify and give them the special discount cards. If it is not effectively carried out, due to practical logistic issues, this scheme is definitely open to abuse. So the government might as well just provide free rides.

The whining upper middle class won’t be joining the queues at the crowded KTM stations, that’s for sure. It will still be the same KTM passengers who want to cut down on their financial expenses because they live in the outer city zones or even in Negri Sembilan but travel daily to Kuala Lumpur to work or to study.

The 70 new 1Malaysia Clinics will surely be welcomed as they would be a great help to the urban poor. Furthermore, 350 clinics would be upgraded and an additional 150 dialysis machines will be made available in government haemodialysis centres nationwide. All measures to improve healthcare facilities for the masses are surely welcomed.

But there is one area where the whining from the Malaysian middle class is legitimate – the crime problem.

We have repealed laws such as the Emer­gency Ordinance because the intelligentsia in urban areas demanded it. But the reality is that many of the Simpang Renggam graduates are now on the streets and the police cannot find these crooks because their hands are tied.

Budget 2013 has allocated for 496 CCTV cameras to be installed in 25 local authorities nationwide to prevent street crime in urban areas. This is like a drop in the ocean and surely insufficient.

We should have thousands, if not hundreds of thousands, of these cameras put up, as in London, to keep an eye on potential criminals.

As I write this, I have just been informed that my colleague had his new car hijacked by two men while he was on his way home with his wife and son in Subang Jaya. Incidents like this point to the necessity of having more of our policemen out on patrol.

The proposal to increase the number of police personnel for patrolling and combating crime is in the right direction. The police also have to review how police reports are made so that a person making a simple report about a car accident, or a lost handbag, does not have to compete with people making reports for serious offences. We need to put our policemen on the streets, not behind desks.

Let us consider making Rela, the civil service group, and volunteer policemen take over simple tasks like crowd and traffic control. The Budget has proposed an additional 10,000 officers for the Police Volunteer Reserve force. This is not something new but it will definitely reduce the unnecessary burden on the police.

On the Beat By Wong Chun Wai

 

HBA: Housebuyers may struggle to pay

Among the goodies were the building of 123,000 affordable homes at a cost RM1.9bil in key locations such as Kuala Lumpur, Shah Alam, Johor Baru, Seremban and Kuantan. The houses will cost between RM100,000 and RM400,000 each.

THE National Housebuyers Asso­ciation (HBA) has warned that house-buyers may struggle to service monthly loan payments if they buy homes under the My First Home scheme.

An applicant with a household income of RM5,000 a month, or a couple with a combined income of RM10,000, will not be able to afford the monthly repayments of a RM400,000 housing loan based on a 30-year repayment period after taking into account other household expenses and mandatory tax payments, said its secretary-general Chang Kim Loong.

Chang said applicants who commit to housing loans of RM400,000 with an average interest rate of 4.75% would end up having to pay RM2,086 each month.

“Based on Bank Negara Malaysia (BNM) guidelines, a single loan repayment cannot exceed one third of the applicant, or joint applicant’s gross income.

“It would also be a potential disaster for a household which cannot afford to fork out the 10% down payment from their savings to commit to a RM400,000 loan,” he said.

He said house buyers should always match the repayment period with the number of remaining years they expect to work.

Otherwise, he said, the applicants would not be able to retire, or end up committing their children to continue paying the loan.

On PR1MA, he said, the price cap of RM400,000 for homes was too high.

“PR1MA should be pricing their properties below RM300K, preferably in the range of RM150K to RM300K to cater to a wider base of the middle-income and lower-income groups,” he said.

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Are Malaysian salaries enough to draw our talents back?

 Click on graphic for larger view.

FOR Daniel Chew, Brisbane a city of modern skyscrapers but known for its laidback lifestyle has been “home” for the last 10 years.

Even before graduating with a degree in Commerce from the University of Queensland, Chew, 29, remembers having secured a job offer. The fact that his qualifications entitled him for permanent residence in Australia only made his decision to stay on so much easier.

His career path was set out in 2005, with him joining KPMG as an auditor, and later moving on to its corporate finance division where he specialised in business valuations. His years in professional practice also saw him qualify as a chartered accountant.

Today, Chew is a commercial analyst in the oil and gas industry, and he says the salary range for such a role can be anywhere from A$80,000 (about RM255,000) to A$140,000 (about RM446,000) per annum, “depending on the level and type of experience”.

“I don't think I could be earning in Malaysia what I earn here. Just the exchange rate alone already makes the salary here three times more than what it is in Malaysia,” he says.

Opportunity and lifestyle are two other factors that are keeping him Down Under, but he does not discount the possibility of returning to Kuala Lumpur if a good opportunity presents itself.

“Right now I have a girlfriend here, which means that if I were to go back, it must also mean that there is a good job prospect for her as well.

“Having a good salary package would definitely be a good motivator (to move back), but I'm also looking at career growth opportunities. And being close to my family would be a plus point,” he says.

Norman: ‘Salaries in Malaysia in the mid-tier management are generally about 10% to 30% lower compared with that found in our Asia Pacific counterparts such as Singapore, Hong Kong and Australia.’

Another Malaysian, who only wants to be known as Justin and who has been in London for about nine years, says he is apprehensive about coming back.

Justin works in the finance department of an investment bank. The market rate for his role is roughly between £50,000 (about RM248,000) and £60,000 (about RM297,000) per annum, one which he isn't sure Malaysia can match.

“I don't know if Malaysia would be able to offer a better salary package but for me, the main question is whether Malaysia will be able offer the same opportunities.

“London is a world hub for foreign exchange (FX) and other investment banking products such as credits, equity, rates, etc, whereas the products traded in Malaysia are considered vanilla'. What I do in investment banking is quite specific. Even if I were to move into a different product area, there might not be a lot of opportunities for my career development in Malaysia,” he says.

However, Justin adds that taking care of his ageing parents in Kuala Lumpur is also an important consideration, and if push comes to shove, “Singapore might be a feasible option”.

Chew and Justin are just two examples of the many Malaysian talents living abroad, and to pull them back, salary and career opportunities are two factors which need to be seriously looked into. It has been reported that at present, as many as one million Malaysians are living abroad.

Interestingly though, according to Kelly Services managing director Melissa Norman, salaries in Malaysia in the mid-tier management are generally about 10% to 30% lower than that in our Asia-Pacific (Apec) counterparts such as Singapore, Hong Kong and Australia.

“It varies depending on the functions and skills, but for the mid-tier level, the difference is between 10% and 30%. When it comes to the C-suite executives, the difference could be much higher (where salaries overseas could double that in Malaysia),” she says, adding that the exchange rate alone is a pull factor for Malaysians to work overseas.

Money issues: It has been reported that as many as one million Malaysians are living abroad. To pull them back, salary and career opportunities are two factors which need to be seriously looked into.

 

(Refer to the chart, which is derived from the Kelly Services Asia Pacific Professional and Technical Salary Guide 2012. The salary guide is based on the actual transactions between Kelly's clients and candidates.)

Currently, positions that are in high demand in the Apec region are in the engineering and information technology industries.

“Where it shows (in the chart) that Malaysia is offering a higher salary compared to, say, Singapore, it means that those are skills which are highly in demand. They are niche skills, and companies are willing to pay a higher salary to bring in talent from abroad,” she says.

Generally, Norman says, fresh graduates in Singapore are commanding a starting salary of about S$2,500 (RM6,200), while many Malaysian graduates are “still hovering between RM1,800 and RM2,000”.

“You need to go one step further and ask Why are they getting paid a little more, and why are we paid a little less?' This brings you to the quality of the students. The majority of graduates here come out lacking in skills.

Sure, Malaysia is moving towards a high-income economy, but if wages go up and productivity remains the same, it would be a recipe for disaster. - Shamsuddin Bardan, MEF executive director

“When you talk about Singapore graduates, you're talking about universities like NTU (Nanyang Technological University), which are the cream of the crop. So the package they earn is warranted based on the quality of their background.
 
“Over here, you have the cream of the crop too, but naturally they get picked by all the big boys' (major firms and MNCs) even before they graduate. And you will have a pool of students who study overseas, but they don't come back,” she says.

Malaysian Employers Federation (MEF) executive director Shamsuddin Bardan adds that when it comes to salaries, one has to look at the productivity aspect as well.

“When you talk about whether Malaysian salaries are competitive, you have to factor in productivity. According to the MPC's (Malaysia Productivity Corporation) 2012 report, Malaysia's productivity is 3.8 times lower than Singapore's productivity.

“In simple terms, what takes one employee to do in Singapore takes 3.8 employees here to accomplish the same task,” he explains.

According to the report, Malaysia's employee productivity value (the value of productivity of one Malaysian employee) is at US$14,217, lower than Hong Kong at US$65,174 and Singapore at US$55,702.

“So to look at wages on its own, that would not be fair. Sure, Malaysia is moving towards a high-income economy, but if the wages go up and productivity remains the same, it would be a recipe for disaster,” Shamsuddin says.

But the fact remains that brain drain and talent scarcity in Malaysia are very real issues that challenge employers.

Norman says that organisations are definitely “feeling the pinch of scarcity of skilled talent” which is prevalent today as people are very open to the idea of changing jobs and moving countries.

Since 2010, the Government has also been trying to woo talent back via TalentCorp, and more recently, Prime Minister Datuk Seri Najib Tun Razak announced the Talent Roadmap 2020, a nine-year time frame designed to address the underlying issues affecting talent availability in Malaysia.

So what will it take to bring our Malaysian talents back?

“Motivation is different for different people, but I would say the top three things would be the total package (salary, compensation plus benefits), the type of role these talents will have here (roles will have to be better, as no one moves laterally), and the policies that are involved (how easy it will be for talents to come back with foreign spouses, for example),” Norman says.

She adds that in trying to attract Malaysian talents back, the “rewards and the opportunities must be fairly presented so there's a nudge for people to make that move”. “To a certain extent, having Malaysians abroad is good for Malaysia, because of the exposure that they will have. But if we can bring them back, they can do so much for the country.

“Today when you look for talent, organisations need to pitch. If the talent is extremely great, some companies even have an attraction bonus just to get them to sign on. Package jumps when you're doing head hunting is fairly high,” she says.

Talent retention is equally important.

“We must recognise the fact that we must do something to retain the talent we already have here, so we don't also lose them eventually,” she says, likening it to a leaking bucket.

Ultimately, Norman says, the talent that Malaysians want back are “skilled workers who are in demand with niche expertise”.

To bring them back, the question which will need answering is “What's in it for them?”

BY LISA GOH  lisagoh@thestar.com.my/Asian News Network