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During his winding-up speech on the policy’s white paper, Rafizi said the government’s aim was for the policy to be a temporary form of intervention to raise wages in certain sectors.
“We hope that, together with other economic plans, when the economy and industries grow with a prepared talent (pool), the salary rate will increase until our employee compensation rate is close to 40% (of the GDP).
“After that, the talent market will function on its own,” he told the Dewan Rakyat, in reply to a question by Ku Abd Rahman Ku Ismail (PN-Kubang Pasu) on the policy’s sustainability.
The Dewan Rakyat passed the white paper on the progressive wage policy by voice vote after 18 MPs had debated on the motion.
Under the 12th Malaysia Plan, the government aims to achieve an employee compensation rate of 40% of the GDP by 2025.
Earlier, Rafizi said the employee compensation rate stood at 32% as of last year, as the Covid-19 pandemic had led to many losing their jobs and hindered salary hikes.
Rafizi also said that the policy was not a wage policy, but a “temporary” economic policy.
He added that the progressive wage policy would help small and medium enterprises (SMEs) retain their talent base, as high talent attrition was a major problem for Malaysia.
He said the high attrition rate had caused SMEs to question the point of paying higher salaries and providing more training for their workers who would end up leaving the company after a year.
“The progressive wage policy is aimed at fixing this (high attrition rate) situation and helping in talent retention for SMEs which comprise 98% of our economy.
“When that (talent retention) happens together with a better salary, they (talents) will remain with the SMEs for much longer.
“We hope that this will enable the SMEs to (start) focusing on scaling (up) their (business) activities so that our country will not be solely dependent on huge multinational corporations.”
On allocations for the implementation of the progressive wage policy, Rafizi said there would be a pioneer programme in 2024 on the policy implementation with the first 1,000 companies that participate in the programme.
The final amount of the allocation for the pioneer programme will depend on the number of companies that register for the programme and the number of workers in these companies.
Rafizi said a portion of the RM900 million development expenditure allocation given to the economy ministry would be used for the pioneer programme “with a ceiling of around RM50 million”.
“The allocation is already there, and when the presentation on (the outcomes of the pioneer programme) is made to the Cabinet in September 2024, the government will make a decision on the next (round of) allocations that will be included in the fifth rolling plan for 2025 and beyond.”
He also said that a report on the pioneer programme would be tabled in the Dewan Rakyat if the government believed there was a need for this.
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