Too hasty to raise minimum wage – SUCCC

KOTA KINABALU (Oct 19): It is too hasty for the government to raising the minimum wage from RM1,500 per month to RM1,700 effective February 1, 2025, said Sabah United Chinese Chambers of Commerce (SUCCC) president Datuk Michael Lui.

Furthermore the Progressive Wage Policy which would be fully enforced next year, will have a great impact on business community, he said.

Lui was responding to the announcement of Prime Minister Datuk Seri Anwar Ibrahim, when tabling Budget 2025 on Friday, that the government had agreed to raise the minimum wage from RM1,500 per month to RM1,700 per month, effective Feb 1, 2025.

Anwar, who is also the Finance Minister, said that the enforcement of the RM1,700 minimum wage for employers with fewer than five employees would be delayed by six months, taking effect from Aug 1, 2025.

Commenting on the 2025 Budget, Lui said it follows the MADANI Economy framework as expected, and is committed to promoting sustainable economic reforms, improving governance, and improving the quality of life of all Malaysians.

“It is fully in line with the budget theme ‘Revitalising the economy, generating change, prospering the Rakyat,” he said in a statement on Saturday.

Lui agrees that the 2024 GDP (Gross Domestic Product) is stronger between 4.8 and 5.3 per cent compared to between 4.0 and 5.0 per cent previously, and will grow stronger between 4.5 and 5.5 per cent in 2025.

The budget deficit is at 3.8%, lower than the 4.3% deficit in 2024.

He said the government’s effort in reducing the fiscal deficit year by year to prevent further deterioration of the financial situation as the continued deficit may affect the country’s economic stability and investor confidence; therefore, the 2025 Budget shows that the government attaches great importance to fiscal health.

“The 2025 Budget allocation of RM421 billion, the biggest in the history, accounting 20.2% of the GDP, of which RM86 billion (20.4%) is for development expenditure and RM335 billion (79.6%) is for administrative expenditure,” he said.

Lui welcomes the RM600 million special grants for Sabah and Sarawak in the 2025 Budget, RM9.7 billion for the 17 work packages of Pan Borneo Sabah Phase 1B and RM7.4 billion for the Sabah Sarawak Linkroad which is aimed to bridge the gap in infrastructure development differences between the two states and other states in the country.

“We always believe that the most critical is for the government to fulfil the disrupted right for development as stipulated in the 1963 Malaysia Agreement (MA63),” he said.

The government also provides RM50 million in matching grants for local entrepreneurs to digitalise and RM3.2 billion for micro loans for small traders.

Lui praised the government’s focuses on the development of small and medium-sized enterprises in key areas such as food security, energy transformation and digitalization.

SUCCC believes that the government should put more attention on the survival of small and medium-sized enterprises, because they provide more than 60% of the country’s employment opportunities and 40% of GDP. The government has taken measures to improve the business environment, provide more loans and policy incentives, and ensure that enterprises can develop stably in an uncertain global economic environment.

With the rising cost of living, the 2025 Budget will provide a significant boost to the Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (Sara) initiatives next year with allocation rising to RM13 billion from RM10 billion which will benefit nine million recipients or 60% of the adult population.

“I believe that many families are still facing inflationary pressures, and it is positive that the government has provided targeted measures such as subsidies and financial assistance to alleviate the huge economic burden on low- and middle-income families.”

Lui also emphasized that the 2025 Budget is a pragmatic and balanced budget, which aims to promote economic growth and improve people’s livelihood while maintaining fiscal stability. The 2025 Budget not only affects the formulation of policies, but also directly affects the direction of economic development.

He called on business community to pay close attention to these changes and be prepared to make corresponding adjustments and plans.