Joint media statement by Pakatan Rakyat Policy Committee on 16th January 2013 in Kuala Lumpur

Small and medium industries deserve a better deal

Pakatan Rakyat understands the concerns of the small and medium entrepreneur industries (SMEs) especially in the context of the implementation of minimum wage policy and calls on the Barisan Nasional Federal Government to do more for the SMEs.

Pakatan Rakyat reiterates its support for the minimum wage policy as one of the policies to upgrade the economy from a labour-intensive to a skill-based one with a reduced number of unskilled foreign workers.

We believe that the minimum wage will help to dismantle Malaysian workers from the low and middle-income trap, eventually propelling and upgrading ourselves to achieve greater social mobility and opportunity in the long run.

The ultimate objective is to create a virtuous circle of high skill, high productivity and high income.

But the minimum wage policy must not be implemented in isolation without any help to struggling SMEs to cope with the transition.

In the new Malaysian economy that Pakatan Rakyat envisages, amongst others,

• The entire Federal Government must practise integrity and zero corruption. Corruption is a major cost to SMEs;

• Monopolies like steel approved permits, Puspakom, Fomena and other forms of cronyism should be curbed and removed to reduce cost;

• Tolled roads should reduce their prices and North South Highway should be free to reduce transport cost;

• The Ministry of Home Affairs will curb the influx of illegal foreign workers as well as reduce the number of documented foreign workers;

• The Ministry of International Trade and Industry will ensure tax reliefs and other benefits must be matched and made easily available to deserving local SMEs, where currently excessive bureaucracy and preferential treatment often result in SMEs not having access to any financial support;

• Foreign investment that is not of quality and not sustainable like Lynas should be rejected outright;

• The education sector will work hand in hand with industries to grow skilled workers and talents necessary for a stronger industrial sector;

Strong political will and a “whole-of-government” commitment by the Barisan Nasional Federal Government is needed to help the SMEs in this transition.

Pakatan Rakyat recommends short term measures like the following to aid the transition:

• reduction or waiver in foreign labour levy for a period of time targeted at skilled and professional workers for eventual upgrading of the talent base;
• remove the middlemen from issuing permits for foreign workers, which will reduce employment costs;
• training subsidy to upgrade skills of workers;
• provide unemployment benefits to workers retrenched as a result of minimum wage policy for a certain period of time;
• and more importantly, a facilitation fund for industry to automate and move away from labour intensive operations.

Pakatan Rakyat aspires to create a humane economy that is high growth, high skill, high productivity and high income, which will eventually produce a “win-win” outcome for both employers and employees. The minimum wage is the basic entry point that will therefore provide for a level of dignity to the labour force in our country.

Issued by

Rafizi Ramli, Director of Strategy, Parti KeADILan Rakyat

Dr. Dzulkefly Ahmad, Executive Director, PAS Research Centre, Parti Islam Se-Malaysia

Liew Chin Tong, Political Education Director, Democratic Action Party