The Malaysian Employers Federation (MEF) has expressed disappointment with the performance of Economy Minister Rafizi Ramli, reminding him of his task to improve the economy and raise the people's standard of living.
"Thus far, MEF has yet to see any such concrete plans from the minister of economy that are really focused and formalised, that would be able to improve the country’s economy thereby raising the standard of living of the nation and its citizens," MEF president Syed Hussain Syed Husman said in a hard-hitting statement responding to Rafizi's recent remarks on possible wage increments.
MEF also said it was "shocked that the economy minister was taking action on something outside his jurisdiction".
"This should be under the purview of the minister of human resources," added Syed Hussain.
This followed Rafizi's announcement of the government's plan for a progressive wage model which could entail making annual salary increments mandatory.
But MEF said higher wages are tied to performance and productivity, while the associated cost increases come from the increased revenue and profits.
"Making annual salary increments mandatory is not part of the progressive wage model equation," it said, adding that industry players had not been involved in any detailed discussions on the plan.
Syed Hussain also reminded Rafizi that the price of labour is determined by market forces, saying that industries worldwide have always relied on market data in ascertaining compensation and benefits.
"The government should not dictate what should be done in terms of rewarding employees," he added.
"Malaysia is an open economy, not a state-owned economy. This is a very important factor for the economy minister to understand and take into consideration, and (he) should not be making salary increments mandatory under the progressive wage model."
Syed Hussain also warned that Malaysia would be in a "serious situation" if the government were to involve itself in determining what industries should pay and do.
"If the country adopts Rafizi's recommendations, we will lose more multinational companies and will no longer be able to attract new investments, be it from FDIs or local investors," he said.
He said if the government intended to mandate salary increments, it should give grants or allocations for "topping up" to meet its determined pay.