Amidst the difficult situation of accumulated national debt and mounting burdens on the rakyat's cost of living in our country, the Malaysia Madani Unity Government is slashing various subsidies which long have alleviated the financial burdens of citizens, yet allocates in excess of RM10 billion to adjust the remuneration of civil servants. This inevitably raises questions about whether the government is sacrificing the welfare of citizens to appease civil servants.
MCA Youth is of the view that the recent decision by Prime Minister Dato’ Seri Anwar Ibrahim to increase the salaries of civil servants is contentious. This is because, under the pretext of consolidating the fiscal deficit, the government is reducing various subsidies such as those for fuel, chicken, and electricity, while it simultaneously bestows the highest salary ascent in civil service history without any notable or substantial public sector reforms. This practice inevitably raises questions as to whether the government is using the taxpayers' money to subsidise civil servants, lacks economic rationality and is purely driven by political expediency.
After the Prime Minister's recent announcement of a salary jump of 13% for civil servants, involving an allocation higher than RM10 billion, he had stressed that the government formulated the policy to adjust civil servants' salaries only after fully understanding the sources of finance. Unfortunately, the premier’s statement still fails to dispel doubts from the public.
The Prime Minister claims that the government has sufficient financial resources to adjust the salaries of civil servants. He also asserts that Malaysia's successful attraction of many multinational giants such as Microsoft, Amazon, and ACWA Energy to invest in the country will expand our national income and tax revenue. However, this explanation lacks conviction.
In fact, foreign investment itself may not instantly rein in tax revenue, especially since investment incentives usually include tax breaks. Subsequently, the generation of local employment and business opportunities may indeed have relevant effects, but these are by no means immediate.
Meanwhile, most of these foreign investments have yet to materialise, and the so-called investment attraction by the government remains merely a prospect. Even if all foreign investments were to arrive immediately, there would not be an immediate expansion on tax revenue. How does the Prime Minister intend to pay for this additional salary expenditure through investment attraction?
Fundamentally, what citizens need most from the government and Cabinet Ministers is for the latter to establish a direction for the country's economy and formulate strategies to achieve national economic prosperity.
Regardless of which government increases the salaries of civil servants, this decision often sparks controversy. This was true even during the Barisan Nasional administration. When a similar announcement was made, it faced attacks from Pakatan Harapan, the then opposition coalition. The crux of the matter lies in whether such salary escalations are based on significant improvements in the public sector’s work efficiency and performance to justify better treatment or was this decision merely a political manoeuvre to please civil servants by those in power.
In light of this, when announcing pay raises for civil servants, the Prime Minister needs to assure the public of two matters: Firstly, that the standard for salary increases is based on civil servants' work performance and efficiency, with only those meeting the criteria being eligible for raises, and simultaneously establish a fairer and more rigorous performance-based system in the public sector to improve overall service levels; Secondly, that the source for the expenditure on salary increase should hail from the income generated by economic growth, rather than at the cost of lowering existing benefits for the rakyat. Only when these two principles are met should salary hikes for civil servants become a driving force for national progress.
Saw Yee Fung
MCA National Youth Secretary General
8 May 2024
-MCA Comm-
