Tackle graft, enhance tax collection, budget management to fund civil servant pay hike, say analysts

SHAH ALAM - Economists urge Unity Government to curb corruption, improve tax collection and better manage federal budget to fund civil servant pay raise, in response to Prime Minister Datuk Seri Anwar Ibrahim's announcement of salary review of lower and mid ranking staffs and Cuepacs' proposal to shorten the service period for contract civil servants to qualify for permanent employment.

Senior Research Fellow at the Social Wellbeing Research Centre (SWRC) of Universiti Malaya Dr Zulkiply Omar said it is important to consider a salary hike for civil servants and to factor in the impact of long-term government expenditures on their welfare.

Yesterday, Cuepacs' president Datuk Adnan Mat had said he has submitted a proposal to Anwar and if approved, about 30,000 contract civil servants in various ministries will be absorbed into permanent positions.

Commenting on the issue, Zulkiply said the salary hike is necessary for civil servants and called for long-term government expenditure planning to consider the impact on them.

“The government may run a deficit in the short run but it is crucial for the growth in productivity in the long run.

“The benefit of productivity improvement will outweigh the increase in fiscal spending. Not to forget, increasing the salary will also improve workers' competitiveness.

“Without salary increment for a long time will drive good workers away and will pull productivity down,” he told Sinar Daily.

“A larger deficit can be managed effectively and become transient. The increase in productivity should help to reduce the deficit,” he said.

Meanwhile, PKT Logistics Group Sdn. Bhd. Chairman Datuk Jalilah Baba viewed that there is no reason for the Unity Government to increase the number of civil servants.

“If there is a need, we can employ professionals or skillful staff on a limited period of yearly or 6 months review based on effectiveness and to bring in targeted results while the budget must be monitored in detail and consistent.

“Not to forget, they must work to bring in targeted results and key performance indicators (KPI)”, she said.

If there are no positive outcomes, she added that a performance review will be conducted to determine whether to terminate the employee's employment or to implement corrective action.

However, Universiti Utara Malaysia economist Dr K. Kuperan Viswanathan has a different opinion and believes that the Unity Government can afford to increase civil servant pay and absorb 30,000 contract workers into permanent positions.

“This can be done through better management of the federal budget and improving the collection of taxes and reducing corruption and over pricing of government projects,” Kuperan said.