CAAM fully takes over Mavcom functions from August 1
PUTRAJAYA: The Civil Aviation Authority of Malaysia (CAAM) will take over the economic regulatory functions of the Malaysian Aviation Commission (MAVCOM) starting Aug 1.
This follows the merger of the two entities, under which CAAM will transition into a Statutory Body with Separated Terms and Freedoms (BBDSB), making it the sole aviation regulatory authority overseeing the technical, safety, and economic aspects of the industry.
Transport Minister Anthony Loke said the merger is expected to save the government between RM1.5 billion and RM2 billion over the next decade.
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The Star
8 hours ago
- The Star
‘Boost pension income through productivity'
WITH rising household debt, stagnant real wages, and a rapidly ageing population, Malaysia faces growing pressure to reform its wage and retirement policies. Some experts are saying that boosting people's incomes through improved productivity and strenghtening reskilling are also crucial to ensure long-term financial security for Malaysians especially as the country prepares to review its retirement age limits. Sunway University economist Prof Dr Yeah Kim Leng points out that increasing wages and extending the retirement age are both needed as part of a comprehensive and holistic approach to addressing the multi inter-dependent challenges. Prof Yeah, who also sits on the Finance Minister's panel of special advisers, says these challenges are posed by population ageing, income inequality, depressed wages and inadequate retirement savings. He also points out that policy- wise, the increase in wages can be done by reskilling and upskilling workers to add value to their portfolios. 'To ensure the majority of Malaysians are able to achieve post-retirement financial security, boosting income through productivity enhancement and reskilling or upskilling programmes are among the top policy priorities.' His comments came on the heels of reports highlighting Malaysia's growing household debt and financial insecurity, with many unable to save adequately for retirement. Recently, former Bank Negara Malaysia governor Tan Sri Muhammad Ibrahim in an interview said Malaysians' real wages have shrunk almost threefold in four decades – he pointed out that based on simple calculations, the starting salary of a university graduate today is only around RM2,000 to RM3,000 a month – his starting salary was RM1,300 a month in 1984, so that's not much of an increase. At the same time, the government is also reviewing the possibility of raising the retirement age from 60 to 65; it has yet to confirm whether, if this is implemented, there will be a flexible scheme to allow early retirement. When it comes to structural reforms that can help Malaysians achieve financial security post-retirement, Prof Yeah says such measures must include the need to raise the quality of education at all levels and ensure the curriculum and teaching staff are upgraded continuously. 'Likewise, financial literacy programmes need to be stepped up to equip all Malaysians with adequate financial knowledge and competency to achieve post-retirement financial security.' AI, automation and productivity Productivity, and in turn wages, can also be improved with automation, especially as Malaysia advances toward a high-income, digitally integrated economy. With rising operational costs, including an imminent increase in the national minimum wage, manufacturers are accelerating the adoption of Industry 4.0 technologies to maintain competitiveness and sustainability. Productivity, and in turn wages, can also be improved with automation, especially as Malaysia advances toward a high-income, digitally integrated economy. — 123rf According to the Federation of Malaysian Manufacturing (FMM) this shift is not merely reactive but strategic, with nearly half of surveyed companies already embracing automation and smart factory initiatives. Yet, while digital transformation enhances productivity and aligns with national goals under the New Industrial Master Plan 2030, it also raises questions about wage equity and the future of work. For FMM president Tan Sri Soh Thian Lai, automation and digital transformation have become crucial strategies for Malaysian manufacturers to adapt to rising labour costs and broader operational challenges. Through the adoption of smart technologies such as automation, system integration, robotics, IoT (Internet of Things) and data analytics, Soh says companies have significantly enhanced productivity and optimise resource use. He also refers to the to the FMM Business Conditions Survey 2H2024, in which it finds 44% of member companies have adopted factory automation and Industry 4.0 initiatives. "The main drivers for this shift are the pursuit of greater operational efficiency and productivity (cited by 60% of respondents) and the need to reduce operating costs (58%), clearly reflecting the industry's strategic focus on sustainable cost-saving and competitiveness-enhancing measures." Soh tells the Sunday Star that the survey findings also show that System Integration is the most widely adopted Industry 4.0 technology (63%), followed by Cloud Computing and Autonomous Robots (45% each), IoT (43%), and Big Data Analytics (34%). "These trends highlight an accelerating shift toward digitalisation, automation and connectivity, with manufacturers prioritising smart technologies to future-proof their operations and build resilience." He points that the digital transformation digital transformation momentum directly aligns with the goals of the New Industrial Master Plan 2030 (NIMP 2030), particularly the Mission-Based Project (MBP) aimed at establishing 3,000 smart factories nationwide. "In support of this national agenda, FMM is playing an active role in encouraging and assisting manufacturers to embark on the smart factory journey. "FMM's initiatives include advocating for greater Government support through enhanced tax incentives, Industry 4.0 adoption grants, and workforce upskilling programmes, as well as providing capacity-building programmes, technical advisory services and knowledge-sharing platforms tailored to the needs of manufacturers, especially SMEs (small and medium entrepreneurs)." But concerns on the implementation of automation and AI over job security remain, especially after it was reported that 300,000 job losses in Malaysia since 2020, particularly in manufacturing and retail. When asked what policies should be in place to ensure that automation leads to fair wage growth rather than increased job displacement or labor exploitation, Sunway University's economist Professor Dr Yeah Kim Leng says workers are protected under the existing employment acts against unfair dismissal or retrenchment. "To counter the job displacement effects of AI and automation, job creation, however, will need to keep pace through increases in investment and entrepreneurship in emerging industries and new economic activities. "There will be rising jobs and skills mismatches that will require re-skilling and upskilling programmes for the affected workers while ensuring the tertiary education institutions are able to supply the relevant skilled graduates to meet the changing industry demand," says Prof Yeah, who also sits on the Finance Minister's panel of special advisers. Yeah stresses that workplace restructuring and adoption of flexible compensation schemes and best practices in response to technology advancement – particularly the use of artificial intelligence, automation, and communication technology – are still crucial. 'This is to ensure employees are fairly remunerated and have job security that enables them to achieve financial security when they retire," he says. He adds besides enforcing policies to ensure fair compensation payment for retrenched employees and adequate employment insurance coverage, employers could be incentivised to undertake placement and reskilling programmes before undertaking automation-related retrenchment exercises. "Tax incentives could also be offered to affected employees to undergo upskilling programmes in collaboration with employers that require trained and experienced staff." The second phase of the mandatory increase in the minimum wage to RM1,700 for employers with fewer than five workers is set to take full effect in August. There have been concerns raised about this, such as wage compression and even the effectiveness of the minimum wage policy. In response, Prof Yeah says the minimum wage ensures that no employee receives an income below subsistence or poverty level. 'The minimum wage increase takes into consideration the rise in living costs as well as increases in labour productivity. 'The minimum wage increase will exert upward pressure on salary structures but adjustment varies by individual organisation's compensation structure, practices, and prevailing industry salary wage trends. 'With the rise in salaries, both employer and employee contribution to EPF will increase, resulting in faster accumulation of retirement savings.' He says although it adds to cost pressures faced by employers and businesses – amid worries from the impending Trump trade tariffs, expansion of the sales and service tax, and petrol subsidy rationalisation – only those that are unable to enhance productivity and profits will be negatively impacted. He notes that, 'with an increase in disposable income through wage increases, there will be stronger household spending that will in turn benefit businesses, although not equally across the various types of industries.'
The Star
9 hours ago
- The Star
Earning, but still yearning
AS an office worker, Hashim Mazlan has been dreaming of a higher salary after five years of toiling behind a desk. At a small construction company, he handles everything from clerical duties to minor accounting tasks. For the past six years, he has been earning less than RM4,000 a month. Living costs in Kuala Lumpur consume a large portion of his income. Rent, car payments, and groceries leave him financially strained at the end of each month. 'I'm sure you heard all the stories about living in the city with a low wage. I wish I have a steady income increase in the future. I'm not even sure if the minimum wage can help me. Am I going to earn the same until I retire? Will I have enough when I'm old?' wonders the 30-year-old father of two. Hashim is among the many Malaysians in the B40 (lower income) and M40 (middle income) groups concerned about lifelong low wages. As of March this year, the median monthly wage for formal sector employees in Malaysia stood at RM2,745 according to administrative data from the Employees Provident Fund (EPF), the Social Security Organisation (Socso), and the Department of Statistics Malaysia (DOSM) – this represents roughly 60% of the country's formal workforce. In a recent interview with Sin Chew Daily for a special Media in Arms report on Malaysia's new minimum wage, former Bank Negara Malaysia governor Tan Sri Muhammad Ibrahim said Malaysians' real wages have shrunk almost threefold over four decades. He noted that while his starting salary in 1984 was RM1,300, today's graduates are earning only between RM2,000 and RM3,000 – a marginal improvement that fails to keep pace with inflation. Unsurprisingly, lower wages translate into weaker savings. As of 2024, more than 52% of EPF members under age 55 had less than RM10,000 in savings, highlighting widespread financial insecurity. The government has acknowledged the crisis and is introducing measures to address wage and savings issues. These include raising the minimum wage, promoting EPF's monthly budget guide based on locality, and reviewing a proposal to increase the retirement age to 65. But are these steps enough? Experts say more needs to be done – starting with raising real wages. Dignified wage level The ideal, dignified wage for individuals and families with two children should be at least RM5,000 a month, depending on location, says Assoc Prof Dr Aimi Zulhazmi Abdul Rashid, an economist from Universiti Kuala Lumpur's Business School. In a recent interview with Sinar Harian , he referred to DOSM data showing that the average reasonable basic living expenses for a household in 2023 was RM4,729 monthly. Understandably, higher earnings support a more comfortable life and better savings. He notes that urban areas face significantly higher living costs, with monthly household expenses averaging RM5,040 compared with RM3,631 in rural areas. 'The B40, M40, and T20 classifications only reflect gross household income and are certainly not accurate measures for analysing such findings, as they don't take into account the actual cost of living. (T20 are the top 20% of earners.) 'Naturally, the figures vary across states in Malaysia and when comparing urban and rural living costs. Among the contributing economic factors are inflation, often driven by demand and supply dynamics, currency depreciation, and Malaysia's heavy reliance on imported food,' he says. Many Malaysians in the B40 and M40 income groups are concerned about lifelong low wages impacting their retirement savings, especially amid the shrinking value of their salaries. — RAYMOND OOI/ The Star While inflation is reported to be under control, Aimi Zulhazmi points out that incomes have barely increased. He notes that the average monthly wage in Malaysia rose from RM3,087 in 2018 to RM3,224 in 2019. In 2022, wages climbed 5.8% to RM3,212 from RM3,037 in 2021. 'It may look decent on paper, but when compared with DOSM's reasonable basic living expenses of RM4,729 in 2023, it's clear that there's a wide gap. 'Selangor recorded the highest at RM5,854, followed by Perak at RM3,723. This shows that the gap between average wages and reasonable living costs remains significant. 'So the existence of the label 'working but still poor' is not surprising.' Wage hike boost Following the increase in minimum wage from RM1,500 to RM1,700 in February 2025, early indicators suggest improvements among low-income EPF members. Data comparisons before and after the policy shift show the median wage for active formal workers rose 5.6% to RM2,745 in March 2025, from RM2,600 a year earlier, says EPF social policy research head Hawati Abdul Hamid. She adds that 2024 saw a strong performance across the EPF portfolio, with a 1.5% increase in active employers to 614,600 and nearly 500,000 new member registrations. 'Total membership peaked at 16.2 million, with over half being active members. Meanwhile, total contributions increased by 15.0% to RM118bil. These trends underscore healthy labour market conditions and a sustained economic recovery in the post-Covid-19 period.' However, she notes that while early signs are promising, more time is needed to gauge long-term effects. 'We expect this positive momentum to continue into 2025, although it is still too early to draw definitive conclusions about the long-term effects of the minimum wage policy.' Hawati stresses the importance of moving towards a living wage – a wage that supports not just basic survival but a decent standard of living and future financial security. 'We emphasise the importance of achieving a living wage ... as advocated by the GEAR-uP initiative under the Madani economy framework. (Gear-uP is a Finance Ministry-led initiative to leverage government-linked investment companies to boost economic growth.) 'While the EPF is not directly involved in wage-setting, we consistently highlight that wage adjustments aligned with productivity gains are crucial for achieving adequate retirement savings.' Hawati stresses the importanceof moving towards a living wage, one that supports not just basic survival but a decent standard of living and future financial security. She acknowledges that some workers still earn below the minimum wage due to part-time or casual arrangements, not necessarily employer non-compliance. Hawati cites a study by Khazanah Research Institute that found minimum wage policies – first introduced in 2013 and revised four times since – have been the most effective intervention in boosting low-wage workers' earnings and reducing labour market inequality. Longer working years? Extending the retirement age to 65 has been long and widely discussed as a means to improve retirement savings adequacy. In a recent commentary, National Union of Bank Employees general secretary J. Solomon said: 'With the cost of living rising and many Malaysians having alarmingly low EPF balances, extending the retirement age to 65 offers a critical opportunity to build stronger retirement savings. It ensures a more dignified future and improves pension fund sustainability.' Taylor's Business School lecturers Dr Paul Anthony Mariadas and Dr Uma Murthy, in a 2023 commentary, said continued employment beyond age 60 could help individuals save more for retirement. However, it may also hinder career progression for younger workers. 'On the flip side, reduced job opportunities for younger workers can occur when older workers remain in the workforce longer. This can create challenges for younger workers who are entering the workforce or looking for new job opportunities,' they said. The Human Resources Ministry is currently reviewing the proposal to raise the retirement age from 60 to 65. The Malaysian Industrial, Commercial and Service Employers Association (MICSEA) has cautiously welcomed the review; it calls for strategic planning, especially for low-income and manual workers who may not benefit equally from extended employment. 'There should also be stronger statutory protections to protect younger and older workers, ensure fair treatment and improve hiring strategies for younger workers, while ensuring these efforts do not impact aged workers remaining in the workforce,' it said. Ongoing help Still, even if Malaysians work longer, are the current salary structures, especially the national minimum wage, enough to support a sustainable retirement? Hawati says the newly introduced Retirement Income Adequacy (RIA) framework allows EPF members and policymakers to evaluate whether current wage levels are sufficient for long-term retirement goals. 'The RIA framework is aligned with Belanjawanku, an expenditure guide that provides a cost-of-living reference for various household types. By setting clear savings benchmarks – basic, adequate, and enhanced – the framework links income with future needs, offering a practical tool for both individual planning and policy calibration.' She notes that RM390,000 is needed to cover basic post-retirement expenses such as food and essentials. 'This helps members visualise the savings required to meet their living costs, enabling them to work towards achieving sustainable retirement outcomes.' The Account Restructuring initiative introduced in May 2024 has also helped balance short-term needs with long-term adequacy. 'The introduction of the three-account structure contributed to an increase in the share of active formal sector members meeting the basic savings target by age – from 33.1% in December 2023 to 37.1% in December 2024. 'This suggests that a well- calibrated account structure can enhance retirement outcomes without compromising financial flexibility.' Additionally, EPF supports adequacy through real dividend returns. 'Our strategic target of delivering over 2% real dividend growth on a three-year rolling basis helps preserve members' purchasing power. "Together, these efforts – adequate wage calibration, clear savings benchmarks, and real returns – form the foundation for a more secure and inclusive retirement system,' says Hawati. Media in Arms is a media alliance comprising Chinese newspaper Sin Chew Daily, Malay daily Sinar Harian, Tamil newspaper Malaysia Nanban, local news broadcaster Astro Awani, and The Star.
Daily Express
9 hours ago
- Daily Express
RM2 billion jobs for Sabah Oil and Gas firms
Published on: Sunday, June 29, 2025 Published on: Sun, Jun 29, 2025 By: Sherell Jeffrey Text Size: Masidi noted that Petronas has also agreed to take in Sabahans as interns, giving them valuable experience in oil and gas operations. PENAMPANG: Sabah oil and gas companies secured RM2 billion worth of work contracts in 2024, a three-fold increase that reflects growing confidence in local capabilities. This means more jobs and money in the industry now stay in Sabah, instead of benefitting outside companies. 'We scored RM2 billion last year and we hope that it is going to be more this year,' State Finance Minister Datuk Seri Masidi Manjun said in his keynote at the Oil and Gas Business Opportunities Forum held at the ITCC Grand Ballroom, Saturday. He also said those who compare Sabah's progress in the industry with Sarawak must bear in mind that the latter has 115 years more experience. 'Sabah and Sarawak are not an apples-to-apples comparison. Oil was discovered in Miri in 1910, so Sarawak is 115 years ahead of us. But we are running faster to catch up with Sarawak.' 'When our mind is focused on what needs to be done, things can get done quite well,' he said, adding credit is owed to the Commercial Collaboration Agreement (CCA), signed with national oil company Petronas in December 2021. The turnaround began when Sabah created its own oil and gas company, SMJ Energy, three years ago. Starting with just RM50 million from the State Government and 11 workers, the company now employs 30 people and made RM362 million profit last year. 'We started very, very skeletal. But within three years the company is now worth RM5 billion in assets,' said Masidi, who is also SMJ Energy Chairman. The key was keeping costs low while focusing on making money. Instead of hiring lots of expensive managers, SMJ Energy outsources specific jobs and only pays when work is completed. A big reason for the success is the Sabah Local Content Council, led by SMJ Energy's OGSE and Corporate Executive Director Terry Biusing. This group makes sure more contracts go to Sabah-based companies. 'We have a local content council chaired by Terry and for the last one year there has been a notable increase in the volume of contracts secured by local companies.' He acknowledged that local companies sometimes lack the technical skills for complex jobs. The State encourages them to partner with experienced international firms whereby the foreign company provides expertise while locals do the hands-on work and learn new skills. Masidi noted that Petronas has also agreed to take in Sabahans as interns, giving them valuable experience in oil and gas operations. The Business Opportunities and Challenges in Sabah's Oil and Gas Industry Forum: The Way Forward was hosted by the Kadazandusun Chamber of Commerce and Industry (KCCI) and Dayak Chamber of Commerce and Industry (DCCI) in conjunction with the Kaamatan Gawai celebration. The forum brought together business people from Sabah and Sarawak to share ideas and explore partnerships. * Follow us on our official WhatsApp channel and Telegram for breaking news alerts and key updates! * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available. Stay up-to-date by following Daily Express's Telegram channel. Daily Express Malaysia
