Adequate Wage Increases To Maintain Real Wages, Prudent Investment Policies By EPF Investment Panel As Well As Protection Of Workers And Trade Union Rights Panel Top 2005 May Day Demands By 11 Million Malaysian Work Force 2005 Labour Day Message by Lim Guan Eng (Petaling Jaya, Saturday): Protection of workers and trade union rights, adequate wage increases to maintain real wages and prudent investment policies by EPF Investment Panel top the 2005 May Day demands by the 11 million Malaysian work force. Other demands are that the country's wealth be distributed fairly, socio-economic justice, free quality health services, training opportunities and consumer rights. DAP calls for the establishment of a minimum wage to protect the welfare and interests of blue-collar and plantation workers. According to the 2004 Bank Negara Annual Report, per capita income for 2005 is RM 17,000/-. This poses the question how many Malaysian households enjoy an income of RM 17,000 annually or almost RM 1,500 per month? Some of these workers get paid less than RM 400 per month, which is well below the poverty line of RM 1,200 per month for each Malaysian household as stated in the Third Outline Perspective Plan 2001-2010 Report. Setting a minimum wage of at least RM 1,000 monthly would prove the seriousness of the government’s efforts to address hard-core poverty, provide some prosperity for all and provide a decent standard of living for Malaysian workers. Further the government should address the need to make adequate increases in nominal wages to increase real wages for the 11-million workers in the Malaysian workforce. This follows worrying claims from NGOs that the real wages of plantation workers (based on 1967 prices) have declined from RM 131 per month(nominal average wage of RM 189) in 1975 to RM 117 per month(nominal average wage RM 350) in 2003. In other words, the value of money to the ordinary plantation workers has declined over the past 28 years to such an extent that he can buy more goods worth RM 131 per month in 1975 compared to only RM 117 per month in 2003. Furthermore, the report of the Economist Intelligence Unit shows that between 2000 and 2003, the gain in nominal wage for Malaysia has been mostly offset by inflation and price increase in utilities and services. Year 2000 2001 2002 2003 Actual average % increases nominal wages 2.0 2.0 2.0 2.0 Actual average % increase in real wages 0.5 0.6 0.2 0.9 Reduction From Nominal To Real Wage 75% 70% 90% 55% The average 2% increases in nominal wages each year between 2000 to 2003 was reduced by more than 55% by inflation and price increases. In fact in 2002, the wage increase was almost wiped out. Thus, re-orienting our focus on real wages would assist us in understand the economic situation of the Malaysian workers. And, there is a need for the Government to help lift the real wages to maintain a decent standard of living for all Malaysians workers. The DAP also calls on the Government to formulate a long term, sensible and coherent human resource policy with three policy goals: first, to encourage the Malaysian industries to climb the global value chain in the long run through a general enhancement of skills, competitiveness and productivity; second, to gradually reduce the dependence on foreign workers; and third, to improve the welfare of Malaysian workers. The Government should also devise a policy that supports woman participation in the labour force. There was only a mere 3 % increase in the woman participation rate in the labour force in the past two decades. It is a problem the Government must address through the provision of support for families, such as subsidized child care services and kindergartens, so that married women may remain in the workforce. The government should address the demands from trade unions such as MTUC to promote protection of workers rights. To date no action has been taken on trade unions’ demands covering the right to form trade unions, speedy settlement of dismissal cases or referral to Industrial Courts, unhappiness with SOCSO, lack of security for contract workers, inadequate compensation payments for incapacitation or to dependants and the impact of foreign workers. DAP calls for a prudent and responsible assessment of investment policies by EPF, especially its stated intention to invest overseas. Public confidence in the competence and ability of EPF was seriously affected when EPF declared a dividend of only 4.75% last year, a rise of only 0.25% compared to the 4.5% dividend of 2003. There is no economic rationale or logic that EPF could declare a dividend of 4.5% when the economic growth rate was 5.3%, a variance of only 0.8%, but not declare a higher dividend of at least 6% when the economic growth rate had improved to 7.1%. In other words, why increase the dividend rate by only 0.25% when the economic growth rate had gone up by almost 2%? Clearly the weaknesses and problems within EPF must be identified and dealt with immediately. To protect the interests of all Malaysians who are contributors towards this fund, DAP calls for the establishment of a Special Committee of Inquiry to resolve these problems. After all how can EPF not record high dividends when it is allocated blue-chip shares, good investment opportunities that is both low-rich and high earnings returns. Malaysia Building Society Bhd’s (MBSB) Dismal Financial Performance And RM 1 Billion Losses One of the reasons for EPF’s poor investment returns are due to EPF’s involvement in questionable projects and bad loans given out by its 63% owned subsidiary, Malaysia Building Society Bhd (MBSB). MBSB is notorious for giving huge loans to political cronies and well-connected companies of BN such as to the failed Perwaja plant. In Melaka alone, such bad loans by MBSB amount to more than RM 150 million. Non-performing loan by MBSB reached a high of RM 4.45 billion in 2002 and is at RM 4.33 billion in 2003. No wonder MBSB achieved the dubious distinction of having the highest non-performing loan ratio of 62% amongst all banks in the country, against the banking average of 7.4% in 2002. MBSB lost almost RM 1 billion in profits from 1998-2002, reducing its shareholder funds of RM 1.1 billion to only RM 70 million. DAP believes that Malaysian workers will no longer accept low dividend payments from a clearly non-performing EPF. If the government is serious about ensuring a prompt, efficient and effective delivery changes, the EPF Board and Investment Panel must be completely overhauled and revamped. To prevent such bad loans given to political cronies, there is a need for an independent EPF Investment Panel and EPF Board. To ensure accountability and transparency, qualified professionals and opposition parties must be represented to ensure that EPF performs its statutory duty as a custodian of Malaysian workers’ trust fund. (30/4/2005) * Lim Guan Eng, DAP Secretary-General |