Publication: NST
Date of publication: Mar 22, 2013
Section heading: Business Times
Page number: 001
Byline / Author: By Ooi Tee Ching
KUALA LUMPUR: There has not been any substantial spike in foreign workers' remittance to their home countries resulting from the implementation of minimum wages at the start of this year, said Bank Negara Malaysia (BNM).
"There's not much impact on monetary outflow despite a 20 to 25 per cent jump in their salaries," said BNM's assistant governor Dr Sukhdave Singh.
"We need to look at this comprehensively. Minimum wages are good for the economy and it ensures Malaysia achieves its high-income nation goal," he said, adding that a blanket wage floor eliminates the price advantage that foreign workers have over Malaysians, thus creating greater job opportunities for locals.
"Small and medium enterprises and the plantation sectors say it erodes our competitiveness. If these sectors' competitiveness is based on low wages, then that's the wrong economic structure," he said.
"The main objective of minimum wages is for low-income earners to be able to afford their basic living needs here," he added.
Sukhdave was speaking to reporters after presenting his views on the country's economic performance at a seminar organised by the Malaysian Economic Association here yesterday.
When asked to comment on Goods and Services Tax (GST) and government subsidy reduction, he said this tax can be implemented in a manner with no significant loss to low-income earners' welfare.
"As far as the government is concerned, many daily necessities like food products would actually be exempted from GST.
"As for subsidy rationalisation, you can physically transfer it directly to the lower income group. It would also significantly help offset any negative impacts of the subsidy rationalisation on the lower income households," he said.
On the Economic Transformation Programme, Sukhdave said it has played a catalytic role in promoting private investment and positively contribute to the country's economy.
