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Whether or not a country is rich is determined not only by its people’s high salary rates, but also by its people’s purchasing power, said Malaysian Prime Minister Dr Mahathir Mohamad.
Speaking at the Prime Minister’s Department’s monthly assembly in Putrajaya today, Dr Mahathir stated that a salary raise will be offset by a rise in living costs.
“The salary may be more [than before], but the capability to buy remains the same,” he said, adding: “What’s the use of becoming a millionaire if we can only afford to buy [things from] along the streets?”
Purportedly citing the case of Singapore to illustrate his point, Dr Mahathir said that Malaysia’s southern neighbour is not a rich country despite its people having high salaries.
Dr Mahathir also suggested that productivity has an influence on the people’s purchasing power, and that it ought to increase simultaneously with their wages.
Should productivity levels stagnate, living costs would continue to rise, as goods will increase in price as a result of production by highly paid workers, he said.
“The production cost will increase, and so will the cost of living. Even with a salary increase of up to 25 per cent, our purchasing power will not [necessarily] increase by 25 per cent.
“So again, there will be a request for higher salaries and wages, but [having] a salary increase without an increase in production, [in the end] the money [that] we get does not have any meaning at all,” he said.
He urged Malaysians, particularly the youth, to adopt noble living values, such as hard work, integrity, and staying away from greed.
“If the government’s administration is [one] of the [ones in the world with the] best quality […] Believe me, even if we have to stand in the sun and listen to the prime minister’s lecture, the results will also be good,” he said.
Bringing to attention his old age, the 93-year-old premier expressed his wish to witness the cultivation of noble values within Malaysian civil servants, who, he hopes, will elevate Malaysia’s status to that of a “Harimau Dunia” [“World Tiger”].
On 10 Aug, Dr Mahathir remarked that the process of increasing minimum wage in Malaysia would be a gradual one, as an increase in minimum wage will also result in an increase of wages that are higher the minimum wage.
Raising the salaries of civil servants will also have to be put on hold, as the Government needs to prioritise repaying the nation’s debts above all else.
“We only established the principle, but it cannot be done immediately due to financial restrictions,” he said, adding that “we [the Government] are the biggest employer of 1.6 million people”.
The nationwide standardisation of the minimum wage — RM1,500 — was a part of the Pakatan Harapan coalition’s election manifesto.
Currently, the minimum wage in Peninsular Malaysia is RM1,000, while it is RM920 in East Malaysia.
Earlier on 23 May after chairing the Pakatan Harapan government’s first Cabinet meeting, Dr Mahathir declared that 10 per cent would be deducted from the basic salaries of the Ministers in his new Cabinet with immediate effect.
He said: “This is a habit of mine. When I was first appointed as the prime minister in 1981, I had cut the salaries of ministers and senior civil servants.
As you know, the senior civil servants are better paid than the ministers,” he said.
“It is up to them if they feel they want to contribute towards lessening the cost in running this country, they can do so.
We will not force them to do so,” he said.
Dr Mahathir said the government will also be revising the annual pay rise for civil servants, which is scheduled every 1 July, as the new Government is not bound by the promises made by the previous Barisan Nasional administration.
In contrast, Singapore’s Emeritus Senior Minister, former Prime Minister and MP of Marine Parade GRC, Mr Goh Chok Tong had recently made a controversial statement regarding ministerial salaries in Singapore at a public dialogue, in which he stated that a pay cut or a low salary would result in “very, very mediocre people” working as ministers.