The EPF is a social security institution formed according to the Laws of Malaysia, Employees Provident Fund Act 1991 (Act 452) which provides retirement benefits for members through management of their savings in an efficient and reliable manner. With rising costs of living, extended life expectancy and more expensive medical treatments, it is critical that Malaysians save as much as possible to ensure sufficient funds for retirement. It is also important for as many Malaysians as possible to be included in the system.

However, as studies have shown, low-income Malaysians are facing significant difficulties in saving enough via EPF. As a result, the Government must act to assist this group of Malaysians who face various challenges in the face of globalisation, particularly with a stagnant or declining real wages. This is clearly reflected in the 9th Malaysia Plan Gini co-efficient statistics where by income disparity among Malaysians has widened substantially. Malaysia ranked highest in terms of income inequality in Southeast Asia.

To assist low and medium-waged workers, DAP proposes raising the Employer EPF Contribution Rate from the current 12% of total wages to 15%, representing a 25% increase. This will in turn raise the total contribution from the employer and employee to the fund to a total of 26%.

At the same time, in view of the increase in cost for the employers, which may in turn affect the competitiveness of Malaysian companies, it is proposed that a limit of RM8,000 per month or RM96,000 per annum be set to Employer contributions to the EPF. That means that for employees earning above the limit, their EPF contributions will continue to be calculated at the limit level.

However, for middle-age workers who are earning below RM1,400 per month , it is clear that they will continue to face severe challenges despite the increase in employer’s EPF contribution. Whilst younger workers may be learning the ropes and learn new skills to upgrade their income level, older workers will face difficulties in our fast-changing economic environment and are in the greatest need of assistance from the state to make ends meet.

With the oil and gas sector contributing handsomely to the state coffers, it only makes social sense to share part of these gains with the less fortunate and lower income tiers within our society. However, at the same time, we still need to continue to incentivise these workers to secure employment to avoid over-dependence on the state. Hence, DAP proposes “FairWage” as an integral component of a new national policy in promoting social justice. FairWage has a 3-prong strategy for implementation: Read the rest of this entry »

I have today given notice to the Speaker, Tan Sri Ramli Ngah for an urgent parliamentary debate on the demand for minimum wage and cost of living (Cola) for private-sector workers in a motion of urgent definite importance on Monday.

This is the motion I will move on Monday:

“That under Standing Order 18(1), the House gives leave to Ketua Pembangkang YB Lim Kit Siang to move a motion of urgent, definite public importance, viz: the MTUC demand for minimum wage and cost of living allowance (Cola) for private sector with potential to result in large-scale industrial action.

“On Monday, 25th June 2007, Malaysian Trade Union Congress (MTUC) staged a 14-location nation-wide picketing by thousands of workers after discussions with the government on its campaign for a minimum wage of RM900 a month and cost of living (Cola) of RM300 for private sector employees came to a deadlock.

“A week earlier, MTUC presented a seven-page memorandum to the Prime Minister asking for minimum wage and Cola for the private sector but did not elicit any appropriate response.

“According to an MTUC study, some four million out of the 10 million workers it represents are earning below the poverty line. Even in Johor Baru where cost of living is extremely high, industrial workers are paid as low as RM390. Even five-star hotels in Kuala Lumpur pay a basic wage of RM290 per month to cleaners and waiters.

“The Prime Minister should initiate tripartite talks involving the government, MTUC and employer representatives on MTUC demand for minimum wage and Cola to avoid escalation of industrial action and ensure industrial peace with justice for three reasons:

• A follow-up to the recent 35% salary increase and 100% increase in Cola for public sector employees to ensure that private-sector workers, especially in low-wage categories, are assured of a decent living and a basic fair wage;
• The flooding of the country with millions of migrant workers on low wages and poor working conditions;
• The loss of confidence of the MTUC in the Human Resources Minister YB Fong Chan Onn’s ability to resolve the issue.”

I am shocked to learn from the MTUC President, Syed Shahir Syed Mohamud that in his 44 months as Prime Minister, Datuk Seri Abdullah Ahmad Badawi had not had any single meeting with the MTUC leaders despite repeated MTUC requests for such a dialogue. Read the rest of this entry »