Minimum Wage, Targeted Assistance Part Of Broader Economic Balancing Act – Amir Hamzah
KUALA LUMPUR, Nov 5 (Bernama) -- Malaysia's minimum wage policy cannot be viewed in isolation but should be seen as complementing the targeted assistance, subsidy rationalisation and affordable healthcare measures to ensure workers' income gains translate into improved household well-being, said Finance Minister II Datuk Seri Amir Hamzah Azizan.
Wage improvements are designed to move alongside initiatives such as the Sumbangan Asas Rahmah (SARA), rationalisation of RON95 fuel subsidies and the upcoming MediAsas medical insurance and takaful scheme, providing a more comprehensive approach to addressing the cost of living, he posted in his LinkedIn account in relation to views he recently shared on a financial podcast.
In Budget 2027, the minimum wage will increase from RM1,700 to RM2,000 monthly from June 2027, benefiting more than four million workers, while the SARA assistance has been extended to nearly 13 million Malaysians, including the M40 group.
As of Oct 22, RM3.6 billion had been disbursed to the Sumbangan Tunai Rahmah (STR) recipients through three payment phases. In total, nearly RM12 billion in STR and SARA assistance had been channelled to eligible recipients.
The allocation for STR and SARA will be increased to RM16 billion in 2027, with the monthly SARA assistance being raised to RM150, or RM1,800 annually.
The government has also scheduled the launch of MediAsas, an affordable medical insurance and takaful option, for late January 2027, as part of efforts to improve access to healthcare protection.
Besides that, RM200 million has been allocated to strengthen outsourced patient treatment programmes to reduce waiting times.
Amir Hamzah said none of these measures should be regarded as a standalone achievement, as each serves to counterbalance other economic considerations.
“None of these is a standalone win. Each one is a counterweight to something else,” he said.
Amir Hamzah said the government is ultimately working towards two key objectives, namely building a sustainable economy and preserving social cohesion.
On economic sustainability, he said difficult decisions involving subsidies, fiscal discipline and revenue adequacy could not continually be deferred, as doing so would shift the burden to future generations.
“Every time we avoid a hard decision on subsidies, on fiscal discipline, on revenue adequacy, we are borrowing against our children's future. That is not something I am willing to do,” he said.
On social cohesion, Amir Hamzah said that widening income inequality could eventually develop into a deeper social problem if left unaddressed.
“If the gap between the top and the bottom continues to widen, we are not just looking at an economic problem. We are manufacturing a social one,” he said.
He cautioned that inequality could have far-reaching consequences that would be more difficult to address than through direct financial assistance.
“Inequality, if left unaddressed, will surface in ways that are much harder to fix than a cash handout. Just look at the devastation inequality has caused in so many other countries. We cannot let Malaysia go down that path,” he said.
Amir Hamzah said this broader consideration guides the government's decisions on targeted subsidies, broadening the tax base and improving wages while ensuring households remained protected.
He said these measures should not be assessed solely based on their immediate individual impact, but on how they complement and balance one another.
“None of these can be fairly evaluated on their single, immediate impact. The real question is always: what is it offsetting? What does it balance?” he said.
Drawing a comparison with conducting an orchestra, Amir Hamzah said managing an economy requires different policies to move in tandem and at the appropriate time.
“Keeping an economy on an even keel is not like pulling a single lever. It is more like conducting an orchestra. Everything has to move together, each section coming in at the right time, to make good music,” he said.
-- BERNAMA