Progressive Wage Model to Adopt Flexible Approach, Says Economic Affairs Minister

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The government is currently exploring the implementation of a progressive wage model that aims to strike a proper balance and not burden employers, according to Economic Affairs Minister Rafizi Ramli.

Addressing the issue that salaries have regressed over the years, the minister emphasised the necessity of a policy that ensures economic stability.

“We have been studying various policy options adopted by other countries. For instance, Singapore implemented a mandatory wage increase approach in the late 70s through a tripartite agreement involving the government and employers collaborating to determine the extent and funding of the increase,” said Rafizi.

He further highlighted that while Singapore achieved remarkable double-digit wage growth for four consecutive years and resolved wage problems during that period, it may not be feasible for Malaysia due to differing economic and fiscal conditions.

Rafizi expressed the government’s commitment to finding a flexible approach that caters to micro-businesses needs, considering their potential challenges in adapting to new wage policies.

However, he added that specific policy details are pending government consent and will be disclosed later.

The announcement was made during a panel session at the National Tax Conference 2023, where discussions centred on developing wage-related policies in the country.


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