Malaysia's Prime Minister Tun Dr Mahathir Mohamad has noticed that the salaries of chief executive officers (CEOs) have been "increasing multiple folds", while workers' wages have been "slow on the rise if not stagnant."
Speaking at Invest Malaysia 2019 yesterday (19 March), he said "this is not right", urging employers to take on a stakeholder mindset and instead, pay workers better if they make more profits.
He also said while economic growth and institutions matter, the benefits to the people is equally important, and that a nation's development goes beyond its gross domestic product or market capitalisation of the stock market.
It is, instead, about building a better standard of living for all.
"We don't want a thoroughly unequal society where capital owners take too much a chunk of national income, leaving the workers or low-income households with scraps," he said.
"Shared prosperity means that everyone benefits and such a situation is conducive for growth and stability. We cannot have one group succeeding, dominating or monopolising everything, while others lag behind."
Dr Mahathir added: "The gap between the haves and haves-not must be narrowed. If disparity is left unchecked, it will create tension and hostility, and eventually lead to confrontations."
Aside from this, Dr Mahathir also addressed the following points:
A guideline on the criteria for appointing chairmen and board of directorsThe Ministry of Finance is preparing a clear guideline on the criteria in the appointment of chairmen and board of directors in Government-linked and subsidiary companies, Dr Mahathir stated.
He said: "Only those capable, with integrity and high moral values will be selected to lead these entities. Those who in the wrong, will be removed."
Further, he announced that the Prime Minister's Office is finalising the 'Guidelines on Remuneration of Directors and Key Senior Management of Government Entities.'
"We find that some of the remunerations package is obscenely high. From now on, rewards will be based on performance."
Ensuring quality education for a quality workforceDr Mahathir also spoke about the need for increased productivity to ensure the sustainability of Malaysia's economy. This depends on the quality of the workforce, which depends on the quality of education, with a human capital that is "e-ready and e-fit."
Dr Mahathir said: "Our vision is to produce quality, future-proof and values-driven graduates through three main outcomes – firstly, the emphasis on values in education; secondly, increasing quality across the system and thirdly, more autonomy and accountability.
"In the last 10 months, key steps have been taken towards these ends. They include reforming the curriculum where the national civic and religious education curriculum are currently under review to ensure values are practiced and inculcated. In other words, let’s make national schools great again."
Further, he said the number of science, technology, engineering and mathematics (STEM) graduates will be increased by making it more accessible, experiential and meaningful, as is the development of a single technical and vocational education and training (TVET) system to ensure standardisation and industry-driven.
He added: "The government has also amended the Universities and Colleges Act (UUCA) to give more freedom for students and cleaning up the procurement process to remove leakages and potential for corruption.
"Moving forward there will be bigger reforms expected after the special taskforce to review in entirety our education policies, from preschool to tertiary, completes their findings next month. The reforms, among others, will touch on several key areas: English language, quality of teachers and the employability of graduates."
The Government will continue encouraging digitalisation of companiesTo be future-ready, Dr Mahathir said both large and smaller companies have to embrace digital connectivity, the use of data analytics and explore opportunities to build digital businesses.
To address this, the Government will encourage and provide incentives to investments and collaborations in turning Malaysia into a hub for digital services and communications.
Additionally, he said: "To further strengthen Malaysia’s economic fundamentals, industrial upgrading through the adoption of technologies is vital. It is in line with the National Policy on Industry 4.0 (Industry4WRD) which we launched late last year. It focuses on encouraging the manufacturing sector to adopt smart manufacturing systems."
Corporate tax rate for certain SMEs will be reduced this yearOn the financial front, Dr Mahathir pointed out that the country's current corporate tax rate is already competitive.
For this year, however, the rate will be reduced from 18% to 17% for SMEs with paid capital falling bellow RM2.5 million, and businesses with annual taxable income of below RM500,000.
As for large companies, which have a slightly higher tax rate, the effective tax rate is less than 10% due to current incentives administered by 32 Investment Promotion Agencies (IPAs).
At the same time, he said: "There will be no new tax for this year, except for sugar tax which we have already announced. It is delayed a bit as we want to ensure that the mechanism is effective to primarily meet our health objectives.
"Beginning next year, the government will use the revenue collected from this tax to provide free and healthy breakfast programme for all primary school children. We want our kids to be strong and healthy to perform in school."
Photo / 123RF