MBAM asks Govt to consider postponing minimum wage, electricity tariff hike

KUALA LUMPUR: Master Builders Association Malaysia (MBAM) has asked the government to consider postponing the implementation of minimum wage and electricity tariff hike for the next two years to accommodate the industry’s stability and capability.

President Tan Sri Sufri Mohd Zin opines that the minimum wage and electricity tariff should remain in view of the current economic and COVID-19 conditions.

"Construction businesses are focusing on finishing up delayed projects while minimising the impact of thinning profit. Further cost increases in doing business can severely impact the construction economy.

"These will mainly affect the operation of smaller contractors in the G1-G4 category,” he said in a statement, today.

Human Resources Minister Datuk Seri M Saravanan said recently that a minimum wage of about RM1,500 is expected to be implemented before the end of this year.

Sufri said the proposed rise in minimum wage will observe a 25 per cent increment since the last adjustment in 2020, making it a 12.5 per cent increment yearly which is a big jump from the previous yearly range.

He said since the pandemic hit Malaysia, contractors were required to absorb all the additional COVID-19-related mitigation costs and adhere to Act 446 in providing a conducive living space for workers.

"All these costs were not factored in the project cost which resulted in contractors having to bear the burden,” he said.

Commenting on the electricity tariff hike, Sufri said Tenaga Nasional Berhad (TNB) still records an increase in its revenue and earnings with the imbalance cost pass-through (ICPT) rebate of two sen per kilowatt-hour (kWh) implemented on all customers previously.

Recently, Energy Commission announced a surcharge of 3.7 sen per kWh for non-domestic consumers such as industrial and commercial for the period of February 2022 to June 2022 -- a significant increase of 85 per cent from the last electricity tariff.

Hence, Sufi said businesses should not be taken advantage of during such challenging times.

"Depending on the size of business and usage of electricity for construction operations, the increase of electricity tariff will greatly impact smaller contractors’ survivability,” he added. - Bernama