KUALA LUMPUR: Second Finance Minister Datuk Seri Johari Abdul Ghani has voiced support for a minimum wage of RM2,700 but says the increment must be gradual so as not to hurt small and medium enterprises (SMEs).
He said SMEs formed the backbone of the economy and contributed 65 per cent or about 6.8 million jobs.
“If you want to increase the minimum wage, you must ensure that they (SMEs) are able to absorb it. If they can’t, they will close down their businesses and we will lose employment,” he told reporters here yesterday.
In its 2017 Annual Report, Bank Negara Malaysia (BNM) had said based on a study in 2016, the living wage in Kuala Lumpur ranged from RM2,700 a month for an individual to RM6,500 monthly for a couple with two children.
Currently, the minimum wage is RM1,200 for the public sector and RM1,000 for the private sector.
Johari said for minimum wage to grow, the country’s economy must likewise expand.
“Today, our economy’s size is about RM1.3 trillion. So maybe in the next five or six years, if we continue to grow our economy, the companies will be able to absorb (the higher wage). Then we can increase our minimum wage.”
He said another way to increase minimum wage was to reduce dependency on foreign workers and focus on automation.
“If we want to ensure this country can afford the minimum wage that Bank Negara has indicated, we need to give more attention to automating all our businesses.
“You can’t rely anymore on foreign workers, and we have to reduce the number of foreign workers in all industries that rely on them,” he added.
Earlier, Johari said as a result of continuous and coordinated efforts by the government, Malaysia could now take pride in the depth of the country’s financial market.
He said Malaysia’s financial system as of January this year stood at RM5.83 trillion, or 450 per cent of the country’s gross domestic product.
Banking assets amounted to RM2.56 trillion or 44 per cent of the financial system, with Islamic banking making up 25 per cent or RM640 billion of total banking assets.
“The Islamic capital market also continues to thrive with a total size of RM1.9 trillion in 2017, and Malaysia maintains its leading position with a market share of 38% in global sukuk issuances,” he added.
Johari said stock market capitalisation stood at RM1.96 trillion or 33.6 per cent of the financial system, and bond market was outstanding at RM1.3 trillion or 22.4 per cent of the financial system. – Bernama