KUCHING: Sarawak Premier Tan Sri Abang Johari Openg urges the government to come up with a mechanism to effectively control inflation to ensure that workers can fully benefit from increases in wages.
He said that any wage increase announced by the government or the private sector is meaningless if it only leads to a sudden increase in the prices of goods and services as well.
“If wages increase, local consumption can also increase. This will stimulate the economy, but it might cause higher inflation.
“We don’t want a salary increase while purchasing power remains the same, as this does not give any benefit,” he told reporters.
Abang Johari was commenting on Economy Minister Rafizi Ramli’s statement that the federal government would review the United Nations Children’s Fund (Unicef) proposal to set the minimum wage at RM2,102 per month compared with the current RM1,500.
Rafizi said the MADANI government’s policies focus on increasing people’s wages to overcome any rise in the cost of living.
Abang Johari said that the federal government, especially Bank Negara Malaysia and the Ministry of Finance must consider the impact of a percentage wage increase on the flow of money in the market.
“Our economic policy must be balanced and banks should provide their input as inflation results from too much money (in the market chasing) too few goods. If you raise interest (rates), the flow of money in the market will also be reduced and the supply of goods will decrease,” he explained.
According to Abang Johari, he has instructed state secretary Datuk Amar Mohamad Abu Bakar Marzuki to conduct a detailed study concerning the wage increase for the state’s civil servants, which the private sector usually follows depending on their financial ability.
“For us in Sarawak, we will conduct a study on wage increase based on productivity. The state government emphasises skill and talent development (to create high-skilled jobs).
“If you have the skill, then your pay is higher,” he added.
— BERNAMA
