PETALING JAYA, Sept 7 — Malaysia cannot have high minimum wage levels if it wants to be able to compete with other countries, Prime Minister Tun Dr Mahathir Mohamad said today.

Dr Mahathir acknowledged that some may want the minimum wage to be fixed as high as RM1,500 or RM1,800, but indicated this was currently not possible due to the state of government funds.

"But we are in a situation where much of the funds that should be there were used to pay debts — huge debts — and service the interest of the debt. So we cannot increase expenditure.

"And we have to remember, we are competing with other countries. If the cost goes up too high, we will lose our competitive edge,” he told reporters after chairing a Pakatan Harapan (PH) presidential council meeting.

The PH government had on Wednesday announced that the minimum wage for the private sector will be raised to RM1,050 across the board for peninsular Malaysia (currently RM1,000) and Sabah and Sarawak that are both at RM920.

PH had in its election manifesto promised to equalise and increase monthly minimum wages to RM1,500 by its first five-year term and with the rate reviewable every two years, also pledging that the government would contribute half of the pay hike.