The presence of about 1.5 million foreign workers stands in the way of a minimum wage being implemented for Malaysians, according to the government.

Should the policy be changed, as the Malaysian Trades Union Congress (MTUC) wants, it would mean that foreigners would be entitled to a minimum wage, just like locals.

"One of the attractions of investing in Malaysia is competitive pay for workers. An across-the-board adjustment would be detrimental to our competitiveness," said Deputy Human Resources Minister Abdul Rahman Bakar told the Dewan Rakyat this morning.

Last week, minister Fong Chan Onn had urged MTUC to drop its minimum wage demand, saying that private firms would not be able to match the pay-scale of the public sector.

MTUC wants employers held to a minimum wage of RM900 a month and to provide a cost of living allowance (Cola) of RM300 per worker.

Replying Lau Yeng Peng (BN-Puchong), Abdul Rahman pointed out the problems to employers if they have to pay at least RM1,200 per foreign worker.

"We have over 320,000 domestic maids in the country. I don't think employers will be able to afford to pay a minimum wage of RM1,200. Is (the demand) appropriate when their salary of at least RM500 is considered a lot compared to their wages back home?

"We determine the wage according to the employers' capacity to pay, as well as the geo-political and geo-economic situation. We cannot equate the pay for working in Kuala Lumpur with working in rural areas."

Locals not interested

To another question as to why the government does not appear to be taking steps to draw more Malaysian workers into the home market, Abdul Rahman said locals are not simply not interested in sectors like construction, services, agriculture, farming and manufacturing:

He said the government would continue with its select minimum wage system, implemented in the 1980s, which applies to clinics, security firms and ports.

"The government cannot impose a wholesale minimum wage system as we need to take into consideration the employers' ability to pay," he reiterated.

"More worryingly, if we force through a minimum wage system, there is a big possibility that foreign investors would not be interested in coming here.

"I see that MTUC has an agenda. Maybe there is an election this year. And they might be backed by opposition parties. We reject their argument."

Malaysia's workforce of 10.5 million includes an estimated 2.5 million foreigners, about 1 million of whom reportedly do not hold valid travel documents.