Heed BNM's wage reform call before expanding SST, urges ex-DAP MP
Former DAP lawmaker Charles Santiago has urged the government to seriously heed Bank Negara Malaysia’s (BNM) call for structural wage reforms.
He said this step must be taken before the government proceeds with expanding the scope of the sales and service tax (SST).
"Is Bank Negara sending...
Summary
Ex-DAP MP Charles Santiago warns Putrajaya to address stagnant wages before expanding SST scope.
He cites BNM’s view that inflation control alone can't ease cost-of-living strain amid weak wage growth.
He also urges structural reform and fairer wage distribution, pointing to Sime Darby Property’s RM2,700 minimum wage as a model.
Former DAP lawmaker Charles Santiago has urged the government to seriously heed Bank Negara Malaysia’s (BNM) call for structural wage reforms.
He said this step must be taken before the government proceeds with expanding the scope of the sales and service tax (SST).
"Is Bank Negara sending a message to PMX (Prime Minister Anwar Ibrahim)? Wages aren't keeping up - not with prices that rose by 17.5 percent and productivity that jumped by 7.4 percent.
"The cost of living is biting, and the pay cheques aren't catching up. Before raising SST, the government needs to ask: can Malaysians afford more?" Charles said in a series of postings on X today.
He added that while the minimum wage has since been raised to RM1,700, the figure is said to be "not enough".
"Bank Negara calls it a 'structural misalignment' - that's the polite way of saying yes, productivity goes up, but your pay cheques won't. The gains of productivity go to the rich, (but what about) the poor?
"The market has failed. It's time that the government intervene - without that, the gap will keep growing," Charles cautioned.
He also advocated for businesses to follow in the footsteps of Sime Darby Property Bhd, which had previously raised the minimum living wage for its employees in the B40 category by 80 percent to RM2,700 a month.
"When the economy grows and people don't, we have a problem," he added.
SST expansion
On June 9, the government announced a targeted review of the sales tax rate and an expansion of the service tax scope, both of which will take effect from July 1.
The sales tax rate remains unchanged for essential goods, while a five or 10 percent rate will be imposed on selected items.
The scope of the service tax will be expanded to include six new services: leasing or rental, construction, finance, private healthcare, education, and beauty services.
Yesterday, the Prime Minister's Office asserted that the country’s revenue generation remains limited, and tax expansion is necessary to ensure fiscal sustainability.
Senior press secretary to the prime minister, Tunku Nashrul Abaidah, also emphasised that the government’s core principle is clear: the burden will not fall on the majority of the people.
