Speech at the DAP & Trade Union Leaders Solidarity Dinner at Hotel Fluorida
by Lim Guan Eng

(Kuala Lumpur, Sunday): Let me begin my speech by expressing DAP’s sympathies and condolences to Prime Minister Datuk Seri Abdullah Ahmad Badawi who is grieving over the loss of his beloved wife of 40 years.

Datin Seri Endon will always be remembered as a First Lady with compassion, dignity and an indomitable spirit who accompanied and steadfastly supported her husband through the ups and downs in his political life as well as endured the pain of her breast cancer with equanimity. Despite her illness, Datuk Seri Abdullah carried on with his duties as usual as Prime Minister, a tribute to her sense of duty to the country. Datin Seri Endon will be missed by 25 million Malaysians from all walks of life.

DAP values the Prime Minister’s resolute determination to carry out his duties as Prime Minister as normal without taking any rest. The Prime Minister has a full agenda, comprising the economy, fighting corruption and improving Malaysian competitiveness in education and trade. DAP would suggest that putting labour issues and rights should also be on the top of his agenda. 

Protection of workers and trade union rights, adequate wage increases to maintain real wages and prudent investment policies by EPF Investment Panel are the principal demands of 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.

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 nominal wage increase was almost wiped out. It is not surprising that Malaysia has the worst income disparity between the rich and poor in South East Asia. The UNHDP Report 2004 shows the richest 10% in Malaysia controls 38.4% of our economic income as compared to our poorest 10% controlling only 1.7%. Thus, re-orienting our focus on lifting real wages by the government will help to maintain a decent standard of living for all Malaysians workers.   

A Coherent Human Resource Policy Towards Wealth Creation And Equitable Wealth Distribution And Reforming The EPF Investment Panel.

The Government should formulate a long term, sensible and coherent human resource policy towards wealth creation and equitable wealth distribution. DAP suggests 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 The Appointment Of A MTUC Representative As A Member Of The EPF Investment Panel.

MTUC represents the workers in the EPF Investment Board. However there is no MTUC representative in the EPF Investment Panel, which is the main body deciding on how much of the hundreds of billions of EPF Funds and on what to invest. For such major investment decisions to be made without a workers’ representative, is unacceptable and irresponsible because there is no respect, no accountability nor transparency to 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-risk 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.

(23/10/2005)