Salary hike should be on par with productivity, say experts

SHAH ALAM - Raising civil servants' salaries in the current uncertain economy can bring risks potentially worsening the national debt.

Singapore Institute of International Affairs Senior fellow Dr Oh Ei Sun said salary hike should be on par with productivity.

Furthermore, he said the number of civil servants are high as compared and it requires higher cost for the government to pay more salaries.

"If the salaries are pushed up, the increase must be accompanied with a smaller number of civil servants and adhere to the principle of meritocracy," he told Sinar.

Civil servants' had recently expressed disappointment after the government failed to increase their salaries in Budget 2023.

Future Labour Market Research Centre (EU-Era) economic chief Associate Professor Dr Mohd Yusof Saari said the government needs to boost salaries of the lower income group.

He said the salary hike in public sector will see a higher salary benchmark in the private sector.

"This contributes to the overall benefits to the national economy when wages are increased. It's necessary.

"Individuals will spend more if their salary is higher. It will improve the economy and help increase in gross domestic product (GDP).

However, he said the salary hike will also be seen as adding value to the country if it is on par with work productivity.