KUALA LUMPUR – Budget 2027 must prioritize real wage growth for ordinary Malaysians and provide greater policy certainty for micro, small, and medium enterprises (SMEs), MCA Vice President Datuk Ir Lawrence Low said today.
Low, who is also MCA Economic and SMEs Affairs Committee chairman, pointed out that despite strong national economic expansion—posting 5.4 per cent growth in the first quarter of 2026 and 6.0 per cent in the second quarter—labor productivity gains have failed to reflect in worker pay.
”According to Bank Negara Malaysia’s Economic and Monetary Review 2025, Malaysia’s productivity grew by nine per cent since 2019, while real wages for private sector employees fell by 1.7 per cent.
“Department of Statistics Malaysia (DOSM) data also showed that 66.1 per cent of the 31,500 new jobs created in the second quarter were semi-skilled, compared to just 25.2 per cent classified as skilled roles,” Low stated in a press release.
To address these disparities, MCA outlined three key recommendations for the upcoming national budget, starting with linking government investment incentives directly to high-paying local job creation.
Low urged the government to mandate annual reporting on Malaysian salary levels and hiring figures for companies receiving tax incentives, particularly within the service and data center sectors.
On SME wage policies, Low advocated for 12-month advance notices for any future minimum wage adjustments, alongside clear guidelines on exemption criteria and duration to allow businesses to plan effectively.
”SMEs that invest in automation, digitalisation and employee training deserve receiving additional tax deductions,” he said, emphasizing that small businesses employ nearly 48.7 per cent of the country’s workforce.
MCA also called for policy stability regarding regulatory compliance, citing repeated shifts in e-Invoicing thresholds since June 2025 as an unnecessary financial burden on early-adopting firms.
Low further urged the government to release a dedicated 2027 Business Statutory Costs and Compliance Policy Timeline and clarify its review regarding the proposed two per cent Employees Provident Fund (EPF) contribution requirement for foreign workers.
”Businesses are not afraid of reform. They are afraid of unpredictable reforms. Malaysians need more than strong economic growth figures—they need higher real wages, quality jobs, and living standards that genuinely improve,” Low added.
