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Government postponements

Increasing security guards’ wages: Postponed

“We will increase the salaries based on the various geographical zones and the details will be released later.”

(source: parlimen.gov.my)

S Subramaniam (source: parlimen.gov.my)

Human Resources Minister Datuk Dr S Subramaniam announced in April 2010 that local security guards’ minimum salary would increase by between RM300 and RM400 per month by 1 July 2010. This would raise their salaries to between RM1,100 and RM1,450 per month. He said the adjustment was made in accordance with the Wages Council Act.

Subsequently, the Security Services Association of Malaysia asked the government to postpone the implementation to 1 Jan 2011. Its president Datuk Shaheen Mirza Habib said security guard companies needed more time to renegotiate the new pay with their existing clients. (Source: 150,000 security guards to enjoy up to 75% pay rise, theSun, 22 April 2010)

Two months later:

“We decided to review the decision to implement the new salary scheme by July 1 following a request from the Malaysian Security Services Association to delay it.”

Subramaniam said the cabinet had decided to delay the 1 July salary hike for local security guards so that the industry had more time to update their operations without their business being affected. Subramaniam did not say when the new salary scheme would come into effect. (Source: Pay rise for security guards put on hold, The Star, 14 June 2010)

Introducing Goods and Services Tax (GST): Postponed

“The sales and services tax will be abolished and be replaced with GST, which is a more efficient tax system in terms of cost effectiveness.”

(source: parlimen.gov.my)

Ahmad Husni (source: parlimen.gov.my)

Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah, when announcing the government’s plan to implement GST at a rate of 4% starting mid-2011. He tabled the GST Bill 2009 for first reading in Parliament in December 2009.

Ahmad Husni added that those selling essential goods would be exempted from charging GST. He said the new tax regime would not burden the people and would increase government tax revenue by around RM1 billion. (Source: Parliament: GST Bill tabled for first reading, The Star, 16 Dec 2009)

Three months later:

“We have not decided on any particular date. What is important here is people don’t understand the real effect and intention of GST. Many think it is an additional tax.”

Prime Minister Datuk Seri Najib Razak said on 19 March 2010 that it was not confirmed yet that the government would start implementing GST in 2011. The second reading of the GST Bill was supposed to have been tabled in March 2010 but has been postponed indefinitely amidst protests against the Bill.

Deputy Finance Minister Datuk Dr Awang Adek Hussin announced on 5 May 2010 that the government would only implement GST after passing the Price Control and Anti-Profiteering Act. He said the Act would prevent traders from increasing the price of goods arbitrarily upon the introduction of GST. (Source: No date for GST yet, says Najib, The Edge Financial Daily, 19 March 2010)

Introducing new third-party insurance scheme: Postponed

“To ensure the rakyat continues to have access to motor insurance protection, a basic insurance and takaful scheme will be offered…This scheme will provide mandatory basic insurance coverage for third party bodily injuries and death as well as enable claimants to obtain compensation expeditiously. This scheme is expected to be introduced by mid-2010.”

Najib, in announcing his 2010 Budget speech in October 2009. The finance minister also said in November 2009 that Bank Negara Malaysia (BNM) would be working with the Finance Ministry to create the scheme, which would be offered to the public at reasonable premium rates.

Bank Negara issued the proposed scheme on 23 April 2010. However, the Bar Council and the Federation of Malaysian Consumers Associations opposed the central bank’s proposal for the government to subsidise loses from the new scheme. Both groups urged the government to review the premium for the existing scheme instead. (Source: 2010 budget speech, Office of the Prime Minister of Malaysia’s official website, 23 Oct 2009)

“Bank Negara is expected to discuss the matter in detail with the ministry in July (2010) before it goes to the Cabinet.”

Dr Awang Adek said on 16 May 2010 that the central bank was still collecting feedback from insurance companies, lawyers, and the public.

Additionally, The Star reported on 9 June that Bank Negara would not be able to submit any proposals in July because it needed more time to consult stakeholders. (Source: Bank Negara to wrap up motor insurance talks by July, The Star, 16 May 2010)

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