Can We Expect Minimum Wage To Rise For Budget 2025?
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Budget 2025 is just around the corner, and with it, many hopeful expectations. One of the biggest talking points in recent weeks includes calls for the government to raise the minimum wage once more in response to rising cost of living.
In 2022, the Minimum Wage Order increased the lowest salary to RM1,500 per month. This applies to all employees in Peninsular Malaysia except for those working in micro-businesses and businesses located outside of City Council or Municipal Council areas. Even for employees earning commission, piece rates, or other non-standard wages, their total monthly earnings must meet the minimum amount of RM1,500.
Minimum wage to increase to RM1,700 or RM2,000?
However, the cost of living has continued to grow, which makes things difficult for those earning minimum wage, despite the increase. This has led to increasing calls to further raise the minimum wage.
Human Resources Minister Steven Sim was quoted by various news dailies that a proposal for a new minimum wage was expected to be discussed by the Cabinet in September. The amount discussed was in the range of RM1,700 in relation to the National Wages Consultative Council Act 2011.
Other experts have also been quoted by the media as recommending a RM2,000 benchmark for the minimum wage. This is in line with the new overall minimum pay of RM2,000 for for civil servants.
The prime minister had also singled out the new minimum wage set by Khazanah Nasional Bhd for its employees. He praised the government’s sovereign wealth fund for setting a minimum wage of RM3,000 for its employees.
Hopefully, the government will address the issue during the tabling of the Budget this 18 October and offer potential solutions to the issue.
What else can we expect from Budget 2025
Apart from the aforementioned potential minimum wage increase, Prime Minister Datuk Seri Anwar Ibrahim had mentioned that Budget 2025 will put more focus on devising strategies to stabilise inflation and combat the issue of the rising cost of living.
According to his statement earlier in September, the Madani government has managed to keep the inflation rate steady at 2%, with gross domestic product (GDP) growth for the second quarter of this year at 5.9%. The statement is backed up by the Department of Statistics Malaysia’s Consumer Price Index (CPI) report for July this year which shows that Malaysia’s inflation rate has remained at 2.0% since May.
The pre-budget statement specifies three short-term priorities that will be discussed as part of realising the goals of Ekonomi Madani. These include:
- To raise the ceiling (in terms of restructuring the economy towards greater competitiveness and higher value-added activities)
- To raise the floor (in terms of improving quality of life and inclusiveness of opportunities)
- To strengthen governance and public delivery
Based on this, as well as the economy’s solid performance in recent times, it is very much possible that we may see a substantial increase in allocations and investments in key sectors such as education, healthcare, and social welfare.
There are also expectations regarding tax relief through enhancements to Sumbangan Asas Rahmah and Sumbangan Tunai Rahmah. Socio-Economic Research Centre executive director Lee Heng Guie predicts that an estimated RM8bil to RM10bil will be announced in the Budget 2025, helping households with cost-of-living concerns.
Comparing the biggest winners of Budget 2024
Last year, MSMEs, education, and healthcare were among the biggest beneficiaries of Budget 2024. Up to RM44 billion in loans and financing was set aside for MSMEs, which undoubtedly helped boost Malaysia’s economic performance in the first two quarters of this year. Businesses would certainly like to see this level of support continue and would certainly hope that the government goes even further to help develop fledgling businesses to grow.
On the other hand, education has always been a top priority for the government in every Budget tabling. In 2024, up to RM58.7 billion is being allocated to the Ministry of Education, while the Ministry of Higher Education will be receiving up to RM16.3 billion. The education sector also received plenty of support with maintenance fees as well as offering discounts on PTPTN loan repayments.
The Ministry of Health also received a massive boon of RM41.2 billion to address issues such as overcrowding, fixing dilapidated clinics, replacing old equipment, disease prevention and more.
With record-breaking numbers, Budget 2024 was seen as an incredibly optimistic initiative that would be rather difficult to top. However, the strong economic growth and recovery that Malaysia has experienced in recent months could very well mean an even more optimistic and generous allocation is on the way.
Read More: Highlights Of Budget 2024
