YOURSAY |'What's the point of minimum wage increase if cost of living increases with more taxes?'

Govt reviewing RM1,700 minimum wage – minister

Anwar: Govt open to study integrating GST elements into SST

Siva1967: There should not be a broad-based increase in the minimum wage.

Instead, introduce a more structured and rational approach with a mandatory cost of living allowance (Cola) that reflects the actual cost of living based on the locality where an employee lives and works.

For example, the cost of a plate of nasi padang in a business district in Kuala Lumpur may be significantly different in Kota Bharu or Ipoh.

Therefore, rather than increasing the national minimum wage uniformly, the base salary could remain the same while employees in higher-cost areas receive a higher Cola.

For instance, an employee working in Kuala Lumpur could receive a Cola of RM300 per month, whereas an employee in Kota Bharu or Ipoh could receive RM100 or RM200, depending on the established cost-of-living index for that locality.

Such an approach would, in my view, make greater economic sense, particularly for small businesses and small and medium enterprises, which may find a broad-based minimum wage increase a significant financial burden.

Notwithstanding the above, any increase in wages will inevitably contribute to higher business operating costs. These additional costs will, in many cases, eventually be passed on to customers and consumers through higher prices.

However, a properly structured Cola system would provide a more rational and targeted approach. If implemented based on accurate and regularly reviewed cost-of-living data, it could help ensure that employees receive appropriate financial support while mitigating the immediate cost burden on businesses.

The system could also provide employees with greater flexibility and choice. Employees may decide whether to remain and work in their hometowns or relocate to urban areas where the overall compensation package may be more attractive.

From a human resources and labour-cost perspective, however, the Cola should be carefully structured and should not automatically be treated as a fixed wage component for the purpose of calculating overtime rates, as this could further increase employers' labour costs.

The treatment of Cola for statutory and payroll purposes should therefore be clearly defined within the legislation to avoid ambiguity and unintended cost implications.

This is the kind of approach that, as human resources practitioners, we would appreciate Human Resources Minister R Ramanan to study seriously.

A minimum wage policy should be based on sound economic analysis, regional cost-of-living differences and the sustainability of businesses, particularly SMEs.

The objective should not simply be to announce a minimum wage review or increase. It should be about developing a sustainable, equitable and economically rational wage framework that protects employees while ensuring that businesses can continue to operate, grow and create employment opportunities.

Ultimately, wage policy should be about finding the right balance between employee welfare, cost of living, business sustainability and the overall competitiveness of the Malaysian economy, rather than becoming merely a political tool to win votes.

The Rover: Wages should be determined by market forces and not by law, regardless of the position and productivity output of the worker.

When minimum wages are unsustainable, industries will and have moved to neighbouring countries, shut down or stopped hiring workers.

The civil service is, of course, another paradigm... with bonuses paid regardless of performance.

CareOneCareAll: What is the point of another RM100 to RM200 (minimum wage) increase if the cost of living increases by another RM200 to RM400 with more taxes?

Hrrmph: What is Prime Minister Anwar Ibrahim talking about (his moral conscience not allowing him to support a taxation system in which everyone pays)?

Do the poor not pay sales and service tax (SST) when they buy goods and services? Is this why businesspeople are stuck in this twilight zone known as SST?

Does he realise what a cumbersome system SST is? So difficult to navigate that all businesses are either having to buy software or obtain "experts" to figure it all out!

Goods and services tax (GST) was a breeze compared to SST!

All this so that Anwar can say he abolished GST and comfort his moral conscience? When in fact, taxes are still being paid by all of us, rich and poor!

Except that now, businesses are spending more money just to pay taxes and passing the cost down to all consumers by increasing the price of their goods.

PinkJaguar7289: What exactly does “integrating GST elements into SST” mean? If the government wants to borrow features from the Najib Abdul Razak-era GST, just say so plainly.

Dressing up an old policy with new language does not make it original.

Pakatan Harapan spent years condemning the former premier’s policies, yet now it keeps reviving or continuing them under different labels.

The real obstacle appears to be its ego: it cannot admit that it has few original ideas of its own.

FactsMatter6628: There's no denying that a broad-based GST is the only solution to realign the country's consumption tax.

Najib was right about this, despite the many other things he got wrong.

We now have a bunch of extremely indecisive ministers and MPs still hoping that they can manage the nation's finances by burying their heads in the sand, hoping everything can turn out right.

ScarletTurtle9830: As citizens, we have every right to demand that the government do what is good for the people and the country and not what the politicians want to protect their positions and interests.

Our immediate demand is for the government to reintroduce the GST, say at five percent, and abolish the SST and e-invoice, which are not capable of taxing money more comprehensively from corruption, illegal and untaxed sources.

Foreigners and visitors will also be paying GST when spending money in Malaysia.

Making the poor pay a small amount of tax is not a sin if GST can save the country. After the country is saved, it will create more jobs and increase the incomes for the poor!

If e-invoice is strictly enforced, it may create a situation of business community avoids issuing invoices by whatever means!

If illegal lottery can run alongside the legal one, doing business without using invoices will be the next innovation.

Tmataz: Both Anwar and Ramanan are like broken records; “we will review minimum wage again”.

Malaysian people deserve better leadership. The former domestic trade and cost of living minister, the late Salahuddin Ayub, was on the right track.

He chose to do the work for the benefit of the regular person and focused on affordable food.

But there are so many issues regarding affordability that require dire attention that the rakyat desperately need government assistance- yes, food, but also housing, groceries, fuel costs, easier access to better education, and public transportation.

Anwar has talked about them at length for a decade, but once in government, what progress has he made?

Wakeup Malaysia: Do not raise minimum wages until after the 16th general election.

Raising the minimum wage will surely further increase manufacturing costs and then the cost of living.

Pakatan Harapan will definitely suffer a big setback if the minimum wage is revised before the general election.

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