LETTER | Revised Budget 2023 fails to address low wages

LETTER | Whilst the revised Budget 2023 seems to address a diverse set of challenges, the unity government, in my view, has failed to respond to the erosion of purchasing power of wages caused by the escalating cost of living factors.

There is conclusive evidence to support the fact that our workers are paid a pittance. A Bank Negara Malaysia (BNM) study has benchmarked RM2,700 as a living wage for an individual as a point of reference.

Therefore, there is a compelling need to rectify the mismatch between the existing minimum wage of RM1,500 and the living wage so supported by the 2018 BNM study. That, regrettably, was not given consideration in the budget.

Notwithstanding the fact that the unity government is confronted with multiple challenges, I would argue that it has a moral obligation to separate the wheat from the chaff on the grossly inadequate minimum wage that is currently in force. 

The government ought to have taken cognisance that our workers, including those in the lower range of the middle-income wage bracket of society (M40), are eking their living on unsustainable rates of pay. 

And it ought to have had the courage to migrate, at least progressively, to a living wage model of wage administration, as expounded by the 2018 BNM study.

A reduction of two percent on taxable income for the M40 is a one-off saving which cannot mitigate the financial constraints that they are confronted with on a day-to-day basis. Yet again I would argue that a purposive approach would have been to enhance wages progressively.

During the various movement control orders imposed by the then government, wages were reduced or frozen, translating to lower disposable income and, pertinently, a reduction in contributions to the workers' EPF savings. 

In these circumstances, what ought to have been expected was for the government to, firstly, enhance wages which would result in higher monthly EPF contributions and, secondly, to increase the EPF monthly contribution rates. 

Contributing a one-off RM500 to a selected group of EPF contributors does not address the fundamental issue of depleted EPF savings caused, primarily, by an ill-conceived scheme of EPF withdrawals by those who helmed the government then.

From a worker's perspective, I would argue that the revised 2023 Budget has failed to tackle, head-on, the need for structural changes to the embedded low- and middle-income wage conditions confronting the working masses.

On this score, I am in complete agreement with Cuepacs, the umbrella trade union organisation representing civil servants, on their outcry that the revised Budget 2023 has failed to address the issue of unsustainable wages in the civil service. 

With the unprecedented uptick in inflationary indices, the least the government could have done is to have announced a commitment to review the civil service terms of employment. 

Sadly, even such an undertaking was not even considered in the budget!

In totality, the government, in my view, has sidelined the core challenges faced by the millions of workers, both in the private sector and the civil service. It has failed to address basic issues such as the constantly escalating cost of living, stagnation or declining disposal income and depletion of retirement EPF savings.

Thus, it is my position that the said budget has, as they say, missed the forest for the trees in addressing the economic challenges confronting working-class citizens.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.