KUALA LUMPUR – Former Human Resources Minister M. Kulasegaran has cautioned the government about the alarming potential for abuse and corruption related to the proposed revival of a special fund allocation by the Human Resource Development Corporation (HRD Corp).
Speaking with Scoop, Kulasegaran reiterated his concerns regarding the Budget 2024 proposal to reallocate a percentage of employers’ levy contributions, which could amount to hundreds of millions of ringgit annually, potentially liable to misappropriation.
“With the proposal (to revive the fund), I think the possibility of gross abuse is so high,” the parliamentarian (Ipoh Barat-PH) said.
“We would request that HRD Corp consistently table a report to parliament (on the usage of the funds). Otherwise, it’s another scandal in the making.”
While tabling Budget 2024 last Friday, Prime Minister Datuk Seri Anwar Ibrahim announced a RM1.6 billion allocation for HRD Corp, enabling the creation of 1.7 million training opportunities.
Anwar also revealed HRD Corp’s plan to re-establish a dedicated fund within the Madani training scheme, aimed at enhancing the skills of SME entrepreneurs and supporting vulnerable groups, including individuals with disabilities, senior citizens, retirees, and ex-convicts.
The following day, HRD Corp mentioned the reallocation of 15% of part of the employer’s levy contribution, consisting of funds unused by employers according to the period set by HRD Corp, as stipulated by the Human Resources Development Act Berhad 2001 (PSMB Act 2001).
Expressing his concerns in the Dewan Rakyat on Tuesday, Kulasegaran pointed out that HRD Corp’s annual levy collection now exceeds RM2.2 billion, and the funds designated for the proposed training scheme will surpass RM300 million each year.
Kulasegaran said that during his tenure as Human Resources Minister in 2018, he abolished the pool fund allocation upon discovering its misuse.
He explained that the Governance Oversight Committee was subsequently established, which recommended discontinuing the maintenance of the fund pool after discussions with stakeholders.
He revealed that when the Pakatan Harapan government collapsed in 2020, RM300 million remained in the pool fund.
However, within just two years, these funds mysteriously “disappeared” without any accompanying reports detailing their expenditure.
Kulasegaran insisted on the need for a comprehensive report to account for how this significant RM300 million was allocated and utilised for enhancing skills, upskilling, and reskilling within the nation.
Regarding the government’s handling of the proposed allocation, Kulasegaran stressed the importance of implementing more robust checks and balances.
He pointed out that he had previously published HRD Corp’s Review of Governance Framework Final Report in 2018, which exposed the misappropriation of funds while the statutory body was known as the Human Resource Development Fund (HRDF).
However, the report was removed from HRDF’s website after his tenure as minister.
Kulasegaran stressed the core mission of HRD Corp, which is to provide training for employees, as outlined in the PSMB Act, and expressed his belief that Malaysian employers should eventually be able to train their workers independently.
He lamented the current situation where many individuals are not receiving adequate training in upskilling, re-skilling, and cross-skilling. The country’s skilled worker percentage remains at around 26%, falling short of the targeted 35%.
“It (HRDCorp) has become an institution that has outlived its usefulness but is still kept intact and given life for no reason.” – October 19, 2023