‘WAGE INCREASE COMPLEX, BUT VITAL’
Liew, Khairy discuss challenges of growing Malaysia’s economy
APROGRESSIVE median wage increase may be a complex endeavour to achieve, but necessary. Deputy Defence Minister Liew Chin Tong said Malaysia had been grappling with issues concerning cost of living since the 1997 Asian financial crisis.
“I think the No. 1 issue on many minds is the cost of living. We have been grappling with it as an issue for the last 16 or even 20 years, since the 1997 economic crisis.
“(But) the real problem is that the wage is too low and has stagnated over the last 10 years,” Liew said as a panellist on economic issues alongside Rembau member of parliament Khairy Jamaluddin, during yesterday’s inaugural NST Insight Forum, titled “Malaysian Economy: Issues and Challenges”.
The forum was moderated by NST Leader writer Abdul Rahim Mydin.
Another challenge was to convince employers, employees and the government on the need for a new wage model.
“How do we (do this), through (development of) automation (industry), skill upgrading, reducing the dependence on unskilled foreign workers? It is not easy to shift such a mindset.
Khairy said concerning the minimum wage, he proposed the need to look at the numbers from the sectoral and geographical aspects, which however, could take time due to the amount of data involved.
“You cannot look at nationwide salaries and take that as minimum wage.”
To a question from a member of the audience, Liew believed that a decentralised economic approach could help state governments increase their revenue.
“If you look at India, its police are actually being run by the states. The same goes for schools in Australia, which are essentially the respective states’ purview.
“(In Malaysia), we have a rather centralised structure, in which (almost) everything is being run by the federal government except for land, religious affairs and perhaps resources. Hence, in a sense, (to increase revenue) the state government will often sell land or timber.
One possibility, he said, was to share income tax collection in exchange for services provided by the state.
“So it is not that you take the money without obligation... the obligation is that the state runs substantive services that were previously under the purview of the federal government in exchange for a certain percentage of income tax.
“And I think that will be good for the economy, in the sense that the state government will have a stake in ensuring that the state grows well, instead of (selling) timber.”
Echoing a similar sentiment, Khairy said there had been many success stories of decentralisation efforts and it was a subject that the government should consider.
“There is a big debate about state rights right now, which revolves around Sabah and Sarawak. I think we can sort of extend the debate from there to the other states.
“Sabah and Sarawak obviously have a different deal than the other states. How that equal partnership turns out can also be, not a model, but a lesson for decentralisation to other states.”