Chinese chambers disappointed with Budget

The chambers was hoping for some relief in the minimum wage debacle but was disappointed to find none.

KUALA LUMPUR: Chinese businesses expressed disappointment that Budget 2013 did not provide any “relief” for companies that may struggle due to the minimum wage policy.

“Yes. We are a bit disappointed that there was nothing on this in the Budget,” CK Teo, vice president of the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM), told reporters at its office after watching the prime minister unveil the Budget.

A similar sentiment was echoed by its deputy president Ter Leong Yap, who said they were expecting for some leeway in terms of more time to adjust to the new policy after conveying their concerns in a meeting with top government officials earlier this year.

“I was hoping the Budget would have taken into consideration our concerns (on the issue),” said Ter, who is also the president of the Chinese Chamber of Commerce and Industry of Kuala Lumpur and Selangor (KLSCCCI).

The group had recently released its survey on Chinese perception towards the economic policies of the Najib administration, with the majority receiving the prime minister’s reforms with scepticism.

Among the report’s chief concerns was on the minimum wage and expectations that Putrajaya heed calls to delay putting in place the popular floor wage plan until all related concerns, including gradual implementation of the idea, are addressed.

The report also showed that majority of the Chinese small and medium enterprises is not confident that the Najib administration can lead Malaysia out of its middle-income trap despite making it a key goal under its grand Economic Transformation Programme.

People-friendly Budget

The ACCIM had described the decision to execute the floor wage plan, a key election push for the Barisan Nasional chairman, as hasty and claimed that most businesses could fold if the government went on with the idea.

However, the group said apart from that issue, it welcomed the 2013 Budget as “responsible” and people-friendly.

“The government recognises the need to tackle the rising cost of living as well as other important issues like housing and security,” he said.

As expected Najib unveiled what analysts called an election Budget, courting voters with another round of cash hand-outs and several other money-support programmes just ahead of key polls that must be held by April next year.

This included the absence of any announcement for major fiscal reforms and new taxes, which analysts said are needed to improve Malaysia’s finances but could hurt the prime minister’s elections chances.

But Najib gave the market his reassurance that his government would rein in the staggering deficit to 4.0% of GDP in 2013.

Putrajaya has run on a budget deficit annually since the 1997 Asian financial crisis but sees the deficit shrinking on better tax collection and slightly higher economic growth of 4.5-5.5% in 2013 from 4.5-5% this year.