Image credit: CNA
KUALA LUMPUR: The SME Association of Malaysia has welcomed the cash incentives announced by Economy Minister Rafizi Ramli but claims it does not address the main issue with the progressive wages policy.
Its president, Ding Hong Sing, said implementation of the progressive wage model (PWM) is a far more complicated issue than just raising the pay of workers.
"The cash incentive right now is like giving out a painkiller to a patient with headache... it does not resolve the underlying problem in the long run.
"We welcome the cash incentives, but we hope that the government can scrutinise the real issue here in the implementation of PWM," he said.
According to Ding, small and medium enterprises need support in various areas as they are still not earning enough to support a progressive wage system.
He proposed the government consider providing extensive support to SMEs in the realms of digitalisation, automation and the export of goods and services, as this would lead to a better economy for the nation as a whole.
"Increase the funding for the Market Development Grant (MDG). Having a proper budget to train our local talents that fit into the workplace demand, all of these are far more crucial in the context of boosting the growth of our economy, especially for SMEs.
"We shall prioritise the discussion on how to ensure entrepreneurs can maximise their production and earnings. Then, wage increments would definitely be in the picture when more skilled talents are needed to fill in the spots.
"Employers would definitely be willing to pay more for the skills that are needed. The discussion of wage increment should go hand-in-hand with upskilling," he said.
He was commenting on Economy Minister Rafizi Ramli's statement in the Dewan Negara that employers will receive cash incentives after submitting the relevant documents as proof of having fulfilled the requirements of the progressive wage policy.
Ding said upskilling would also reduce the need for foreign labour and this in turn would lead to stemming the outflow of the ringgit.
"Malaysia is relying too much on foreign workers right now, and that needs to be changed by getting our local talents to be equipped and ready for the workforce.
"Foreign labourers often choose to send remittances back to their home countries, making it challenging for us to retain our ringgit within Malaysia.
"We can break the cycle by having our labour workforce ready," he said.
Source: https://www.nst.com.my/news/nation/2023/09/960398/smes-incentives-progressive-wage-model-welcome