Civil servants are set to benefit from a long-awaited salary increase with the introduction of the Public Service Compensation System (SSPA) on Dec 1. The salary adjustments will be rolled out in two phases.
This phased approach not only eases the government's financial load but also provides the economic sector time to adapt gradually, minimising pressure on the government and the private sector.
Additionally, this measured increase is expected to mitigate the risk of sudden inflation. The adjustment is expected to alleviate the pressure on those in the low- and middle-income groups due to the rising cost of living.
Malaysia's private sector strives to ensure salaries remain competitive, particularly when compared with Singapore, which shows a disparity. This has become a reason for some to seek better-paying jobs and improved living conditions abroad.
To address this, the government introduced the Progressive Wage Model to boost private sector incomes. Under this model, employee wages are set to increase in line with company productivity and performance, which aims to narrow the income gap between our workers and those overseas. The model provides a clear and structured framework to ensure the wellbeing of private sector employees.
Strengthening the competitiveness of the private sector will attract and retain Malaysian talent. It is often said that salary increases lead to rising prices of goods, but price hikes are usually directly linked to production costs and fluctuations in foreign exchange rates, rather than the increase in civil servant wages.
The strengthening of the ringgit against the United States dollar is expected to lower the cost of imported goods, helping to stabilise Malaysian prices. That being said, some businesses might exploit wage increases to raise prices for higher profits.
Moreover, the prices of essential goods have long been regulated by the government. As long as price-control measures remain effective, rising prices should not pose a major issue.
A more pressing concern is the escalating cost of housing in urban areas. In Selangor, the average house price costs about RM500,000, while in Kuala Lumpur, it has surged to RM800,000.
Monthly housing loan payments can consume up to 50 per cent of a family's income. Salary increases alone may not be sufficient to address that. So we need to develop a long-term solution to tackle housing affordability. The salary increase presents civil servants with a chance to reshape their lifestyle towards greater financial prudence.
It's an opportunity to reevaluate their spending habits, adopt healthier routines and become more disciplined in managing finances. For instance, preparing meals at home can reduce expenses while promoting better health.
Additionally, this increase opens doors for us to save more and invest in areas that secure our future, such as children's education, asset acquisition or retirement planning. However, it is crucial to avoid falling into the trap of a luxurious lifestyle. Do remember that salary increases may not happen every year. Therefore, making the most of this opportunity and managing our finances wisely are keys to ensuring financial stability.
PROFESSOR DR TAN PECK LEONG
DR HAMIDAH MD YUSOP
Arshard Ayub Graduate Business School, Universiti Teknologi Mara (UiTM)
This phased approach not only eases the government's financial load but also provides the economic sector time to adapt gradually, minimising pressure on the government and the private sector.
Additionally, this measured increase is expected to mitigate the risk of sudden inflation. The adjustment is expected to alleviate the pressure on those in the low- and middle-income groups due to the rising cost of living.
Malaysia's private sector strives to ensure salaries remain competitive, particularly when compared with Singapore, which shows a disparity. This has become a reason for some to seek better-paying jobs and improved living conditions abroad.
To address this, the government introduced the Progressive Wage Model to boost private sector incomes. Under this model, employee wages are set to increase in line with company productivity and performance, which aims to narrow the income gap between our workers and those overseas. The model provides a clear and structured framework to ensure the wellbeing of private sector employees.
Strengthening the competitiveness of the private sector will attract and retain Malaysian talent. It is often said that salary increases lead to rising prices of goods, but price hikes are usually directly linked to production costs and fluctuations in foreign exchange rates, rather than the increase in civil servant wages.
The strengthening of the ringgit against the United States dollar is expected to lower the cost of imported goods, helping to stabilise Malaysian prices. That being said, some businesses might exploit wage increases to raise prices for higher profits.
Moreover, the prices of essential goods have long been regulated by the government. As long as price-control measures remain effective, rising prices should not pose a major issue.
A more pressing concern is the escalating cost of housing in urban areas. In Selangor, the average house price costs about RM500,000, while in Kuala Lumpur, it has surged to RM800,000.
Monthly housing loan payments can consume up to 50 per cent of a family's income. Salary increases alone may not be sufficient to address that. So we need to develop a long-term solution to tackle housing affordability. The salary increase presents civil servants with a chance to reshape their lifestyle towards greater financial prudence.
It's an opportunity to reevaluate their spending habits, adopt healthier routines and become more disciplined in managing finances. For instance, preparing meals at home can reduce expenses while promoting better health.
Additionally, this increase opens doors for us to save more and invest in areas that secure our future, such as children's education, asset acquisition or retirement planning. However, it is crucial to avoid falling into the trap of a luxurious lifestyle. Do remember that salary increases may not happen every year. Therefore, making the most of this opportunity and managing our finances wisely are keys to ensuring financial stability.
PROFESSOR DR TAN PECK LEONG
DR HAMIDAH MD YUSOP
Arshard Ayub Graduate Business School, Universiti Teknologi Mara (UiTM)
Source: News Straits Times, Malaysia
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