Whilst the revised 2023 Budget seems to address a diverse set of challenges, the “unity government” has failed to tackle the eroding purchasing power of wages sparked by rising cost-of-living factors.
There is conclusive evidence to show that workers in Malaysia are paid a pittance: a central bank Bank Negara study has benchmarked RM2,700 as a living wage for an individual.
So there is a compelling need to rectify the mismatch between the existing minimum wage of RM1,500 and the living wage put forward in the 2018 Bank Negara study. This, regrettably, was not considered in the Budget.
Granted, the government is confronted with multiple challenges. But it has a moral obligation to tackle the existing grossly inadequate minimum wage.
The government ought to have recognised that our workers, including those in the lower range of the middle 40% of society, now have to eke out a living on unsustainable rates of pay. It ought to have had the courage to migrate, at least progressively, to a living wage model, as expounded in the 2018 Bank Negara study.
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A 2% reduction in taxable income for the middle 40% of society is a one-off saving, which cannot ease the financial constraints workers face daily.
A more effective approach would have been to enhance wages progressively.
During the various movement control orders imposed by the previous administrations, wages were reduced or frozen. This translated to lower disposal incomes and reduced contributions to the workers’ Employees Provident Fund retirement savings.
The government should have first, enhanced wages, which would result in higher monthly EPF contributions and, second, increased the EPF monthly contribution rates.
A one-off award of RM500 to a selected group of EPF contributors will not address the fundamental issue of depleted EPF savings caused, primarily, by an ill-conceived scheme of EPF withdrawals, which was allowed by those who previously helmed the government.
From a worker’s perspective, the revised 2023 Budget has failed to tackle head-on the need for structural changes to the low and middle-income wage conditions confronting the working masses.
In this, I completely agree with the outcry by Cuepacs, the umbrella trade union organisation representing civil servants, that the revised 2023 Budget has failed to tackle unsustainable wages in the civil service.
With an unprecedented uptick in inflationary indices, the least the government could have done was to announce a commitment to review the civil service terms of employment. Sadly, such an undertaking was not even considered in the Budget!
All said, the government has sidelined the core challenges faced by the millions of workers both in the private sector and in the civil service. It has failed to tackle basic issues such as the constantly rising cost of living, stagnating or declining disposal incomes, and depleting EPF savings.
The Budget has thus missed the forest for the trees in tackling the economic challenges confronting the working class.