00:00 What are the few sectors that will be selected after the 1000th Congress?
00:05 I want to pre-empt because it has to be done in an orderly manner, just to make sure that the whole process goes through transparently.
00:19 That is why we will start with the Cabinet's powers. The Cabinet's powers will guide the implementation and in terms of the sector, company,
00:36 it will go through the process in the Executive Branch, which will be managed by me and the Minister of Human Resources.
00:46 Of course, as we are developing this, we have several concepts and guidelines on how we will choose.
00:56 It depends on several conditions. The consideration must be discussed and finalised at the Cabinet's powers.
01:07 The consideration includes, for example, sectors that are capable of raising wages by participating in this model.
01:19 We have many sectors. If the sector, for example, has a very high wage gap,
01:27 so even if we choose and we put together this Rintesk project for that sector,
01:33 the number of employees that can do it may be too low.
01:39 So the ability factor and also in terms of gap, because the whole idea is to provide a lift-off.
01:50 If the gap is too big, the maximum we will provide is only 200 per month for fresh graduates and entry-level
02:01 and 300 per month for non-entry-level. So first it depends on that.
02:09 Secondly, it also depends on the sectors that are suited to the needs of the country for our economic restructuring.
02:24 We know, for example, that there are sectors that are given a lift-off. So these sectors will be considered.
02:33 It also depends on the critical sectors in the country.
02:38 The sectors that we need a lot of talent for.
02:48 And another example, it depends on whether there is a company or sector,
02:57 in terms of wage gap and skill gap, it is too high.
03:03 If we think that some sectors are so underpaid and that sector has the financial strength with the incentive to push it up,
03:17 we will consider all these factors.
03:20 But it is a bit difficult to decide now because it is a voluntary opt-in.
03:27 So we will decide on the guidance and we will open it to the registration in April.
03:35 From there, I think we will know better. But those are the guiding principles.
03:40 What about the feedback from the employers?
03:47 I am an employer myself. And we have talked to the MFF, to the industry bodies and so on.
03:56 I am confident that employers will agree.
04:02 The issue is more to what Chester asked earlier.
04:05 Because it is a voluntary opt-in and first come first serve,
04:10 one risk that we need to take is over-subscription.
04:16 There are too many companies that want to join it.
04:19 Because in the talent market now,
04:25 the main issue for employers, companies and businesses is to get talent that matches their needs.
04:34 The salary gap between the top companies, MNCs and SMEs or even half of the GLCs is huge.
04:45 So the cannibalisation has been happening.
04:49 Meaning, the SMEs are struggling to get jobs.
04:54 They get a job, they train for a year and they are fired.
04:59 So this attrition is the main problem for our country's economy.
05:06 So with the base of progressive salaries and programs like this,
05:11 from the early feedback, from the management sessions,
05:15 I am not worried about the participation.
05:18 I am worried about over-subscription.
05:21 So it raises the question that Chester asked earlier,
05:24 why them not me? Why the industry not me?
05:29 So that is what we need to ensure, that guidance is made with care.
05:36 I am actually quite positive.
05:39 I think from our discussions, it will be well received by employers.
05:45 I am similar to what Firdaus was asking.
05:48 In the discussions with stakeholders,
05:51 were there any pushbacks and how did you address that concern?
05:54 Additionally, how much do you estimate this will roughly cost the government over the period of 12 months?
05:59 I think when I and the Community and Economy, we started focusing on labour market reform.
06:09 When we talk about labour market reform, obviously it is about pay, it is about upskilling.
06:15 I have to admit that in the beginning, there was to a certain extent apprehension among employers.
06:27 Because some of them are still grappling from minimum wage.
06:33 It has really pushed up the cost.
06:37 So they were concerned that another round of mandatory wage increase will remove their competitiveness.
06:49 But we have sat down with them and we have taken everyone's view.
06:55 And the decision to make this voluntary opt-in,
06:59 this is not because of pushback, this is not because of lobby.
07:03 It is our personal belief that at this moment, if we were to make it mandatory,
07:10 our economy cannot absorb it.
07:13 Because 97% of the companies are micro SMEs.
07:19 So the moment it is a voluntary opt-in, with government incentive,
07:25 and with a commitment and structured upskilling for higher productivity on the part of the employees,
07:33 employers have so far lauded it really well.
07:36 That is why I remember when we first started talking about progressive minimum wage,
07:40 there were many who said that this will be challenged by the MES.
07:46 They actually support it.
07:48 By and large, to this extent, the employers support it.
07:53 The burden is for us to make sure what we plan and the design,
07:58 when it is implemented, it is really having an impact.
08:02 And to make sure that for every one ringgit that government allocates,
08:06 this really improves the structure of our labour market, the pay structure,
08:12 and most importantly, the skilled talent in the economy.
08:18 If anything, that is my fear more than what all the stakeholders are talking right now.
08:25 And in terms of how much you think?
08:27 How much is actually in kertas putih.
08:30 We've put in simulations.
08:34 Sebab itu, the concept is that it really depends on how much government set aside every year.
08:41 So that's why we will go through the dry run first, for the first 1,000 companies,
08:47 because it's not just about allocation.
08:51 It's not even about the concept.
08:54 It's about the teething operational problem once you implement.
08:57 Because you're talking about tracking and making sure those who are in the scheme,
09:03 on the part of the employees, actually went through the upskilling.
09:08 So we have to make sure that all the upskilling and the right trainings are in place,
09:13 and then we also want to make sure that the employers conform to the syarat.
09:22 So I think once we go through that dry run until September 2024,
09:30 and by then I think we will have a much better view about how much savings,
09:37 all the rationalization and fiscal consolidation.
09:42 We would be in a better position to decide how much.
09:46 But the simulation is we've provided the government with a range of simulation.
09:53 If we allocate two billion a year, it will cover 1.05 million.
09:59 And the increase in GDP at what, increase in taxpayers, popo banyak.
10:06 So if you go to three billion, obviously that numbers.
10:09 And then we will decide the allocation when the time comes.
10:14 But let's make sure that the whole system and process are in place next year.
10:19 First is how much is budgeted for the pilot project?
10:23 Second is how do we measure?
10:25 Is it as long as they completed the training program, then they are entitled?
10:30 And then how do we measure the productivity gain?
10:35 In terms of allocation for the Project Ringteks pilot project,
10:42 we have to see when the, how much it costs.
10:47 We have to see when the registration opens
10:52 and when the final selection of that 1,000 companies are done.
10:56 Because different companies actually have different numbers of employees.
11:01 But on the back of the envelope calculation,
11:05 so if you take 1,000 companies and because these are small and medium,
11:11 so on average if you take that one company is 50 employees
11:15 and you are looking at 200 ringgit per month for one year, 2004,
11:20 you do all that maths, for 2024, it will cost about 20 to 30 million.
11:26 And that allocation is already being set aside in the community and economy.
11:32 So it will not cost us more than 30 million allocation.
11:40 That's why I think it's very doable and we want to do that first to see the feedback
11:46 and especially to resolve if there are any teething problems.
11:51 That is the second question about how do we make sure, how does it work exactly.
11:59 There are two components to it.
12:03 First is on the salary.
12:06 So salary, if a company qualifies for it because it meets all the requirements
12:12 and it increases the pay scale for entry level and non-entry level,
12:24 so they will submit claims.
12:27 The jawatankuasa can decide whether it is going to be disbursed back on quarterly basis or monthly basis.
12:34 So they pay and every three months they claim and they will get their reimbursement.
12:39 That helps their cash flow.
12:41 Likewise, for annual increment, after a year, they will submit their payroll and then claim.
12:53 And then the agencies, we have all the agencies working and connected,
12:59 will be able to verify that they did actually pay.
13:03 Annual pay rise, annual increment basically meets the syarat-syarat yang ditetapkan dalam panduan.
13:14 So that's on the part of the employers.
13:17 On the part of the employee, once they are into the program,
13:22 personally they are also accountable for it because for them to get this,
13:27 say you are a fresh graduate, for them to get the RM200
13:32 and because of that your salary goes up by RM200 or RM300, anything above that,
13:37 maximum is RM200 claim.
13:40 They will have to go through certain training that the jawatankuasa will decide
13:46 and will impose for this particular sector at this level.
13:51 We have to see what upskilling that is required
13:54 and that's where Kementrian Ekonomi and KSM really have to see the big picture.
13:58 How do we plan for the upskilling?
14:02 They have to go through that.
14:04 At the end of the year, all the records have to be completed.
14:11 If they do not abide to the upskilling, then they are dropped out from the scheme.
14:22 So they won't, and once you are out of the scheme, as a person,
14:26 obviously your employer says, "Sorry, you are not part of this scheme,"
14:29 and therefore your salary is like that, not like this.
14:32 That's why we have to do the pilot test because if you see the implementation,
14:39 it does require a lot of work to put in all the tracking,
14:44 to make sure that we can validate everything
14:47 and to put in the training and upskilling in place.
14:50 That includes, for example, how exactly do we measure productivity
14:56 because it's not just in the best interest of the company that productivity goes up,
15:03 it's also in the best interest of government to validate and satisfy ourselves
15:08 that this programme with this kind of allocation actually does yield better productivity.
15:17 I think once the numbers are there, all the systems are there,
15:21 it will allow us to decide better from year to year.
15:24 So there's a lot of work to be done in the next six months to put all this in place,
15:29 but I think you roughly get the idea how it will happen.
15:33 Just to confirm, will foreign talents be included?
15:38 No, no, no. It's only Malaysian.
15:40 No foreign talents, no MNCs, no big companies.
15:44 The focus is on those groups that are now most disadvantaged with the current labour market.
15:55 That is usually between RM1,500 to RM5,000 SMEs,
16:02 and they are either entry-level graduates or non-graduates or semi-skilled.
16:07 [Line Break]
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