The recent decision to raise Malaysia’s minimum wage to RM1,700 demonstrates the unity government’s firm commitment to improving the welfare of workers, according to Prime Minister Datuk Seri Anwar Ibrahim. As both Prime Minister and Minister of Finance, Anwar emphasized the significance of this step, noting that it reflects a bold approach to socioeconomic progress. He stressed that waiting for companies alone to take the initiative in raising wages would only lead to stagnation, underscoring the importance of government intervention.
If I leave it to the companies, there would be no decision it’s impossible to reach one that way, Anwar remarked. He explained that after deliberations with his Cabinet colleagues, it was clear the government needed to act decisively. Malaysia’s economic indicators are strong, with significant investment flows, and, he noted, a prosperous nation should not tolerate the continued underpayment of its workforce. We are not talking about a trivial increase from RM500 or RM3,000; we are moving from RM1,500 to RM1,700, he explained during the launch event of Putrajaya MADANI Residency Housing Development. The event, which took place today, was also attended by Dr. Zaliha Mustafa, Minister in the Prime Minister’s Department (Federal Territory), and Nga Kor Ming, Minister of Housing and Local Government.
The Prime Minister urged companies to comply with the new wage increase, which will take effect in February 2025. When presenting Budget 2025 on October 18, Anwar had announced this policy shift, signaling a substantial change for low wage earners across the country. However, the government has allowed smaller employers with fewer than five employees an additional six months before implementing the new wage floor, recognizing the financial challenges smaller companies might face.
Beyond the minimum wage increase, Anwar’s administration is implementing a 15% salary adjustment for lower-grade civil servants under the Civil Service Remuneration Scheme (SSPA), set to begin on December 1. This move will add more than RM10 billion to the government’s payroll costs, but Anwar believes it is necessary to ensure civil servants are adequately compensated for their roles and motivated to be more accountable.
In addressing criticisms that Budget 2025 lacks large-scale infrastructure projects or iconic developments, Anwar countered by arguing that mega projects should prioritize the needs of the people. For him, “mega projects” include investments in affordable housing, small business stalls, quality school facilities, and accessible healthcare, which he views as essential to the country’s inclusive economic development.
Anwar also called for a shift in thinking across various sectors, including the civil service, political leadership, and the business community, advocating for an economic model that encourages balanced and sustainable growth. He emphasized the need to close the wealth gap, stating that it is vital for the well-being of all segments of society. If the economy does not grow, where will we find the funds? I do not underestimate the importance of growth, he noted, adding that everyone has a role in supporting underprivileged groups to prevent further socioeconomic disparities.
The Prime Minister reiterated the government’s commitment to eradicating hardcore poverty, a goal he said would be prioritized. He highlighted the struggles faced by impoverished families who cannot afford essential items, such as food, baby formula, and school supplies. A prosperous country like ours, which has shown considerable growth and revenue, should not have high rates of hardcore poverty, he stressed, noting that the government has an obligation to support its most vulnerable citizens.
Through these measures, Anwar aims to create a more balanced economic landscape in Malaysia one where prosperity is shared, and basic needs are met for all citizens.
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