PUTRAJAYA, May 1 — Prime Minister Datuk Seri Anwar Ibrahim announced today the government’s plan to raise the salaries of civil servants "to record level” next year, a move that is expected to cost taxpayers RM10 billion more on top of existing spending for emolument.

The salary review will be the first in 12 years, which Anwar announced at the 2024 Labour Day celebration with mostly civil servants and representatives from government-linked firms here.

The prime minister described the increments as "long overdue” to pre-empt criticism. The Malaysian government has long been criticised for its bloated civil service, whose emolument often rack up more than a third of federal budgets.

"There will be those who criticise, but I say when was the last time we had a (salary) review? If they question, ask them how much they are earning," Anwar said in a speech delivered to staff from various ministries and members of the Congress of Unions of Employees in the Public and Civil Services (Cuepacs).

The planned salary increment will come under what Anwar called a new "human resource framework" that would raise the minimum pay for all public sector workers to RM2,000, among others.

The highest increment rate was 13 per cent, but the prime minister said the new increment will be "much higher". The current minimum income, which includes salary and fixed allowances, is RM1,795 per month.

Anwar vowed to raise pay as part of his pledge to alleviate cost of living pressure when he took office in 2022, and his government has managed to stabilise inflation from its peak record that same year.

But low pay, compounded by a weaker ringgit, continues to weigh on buying power as the majority of industries appear reluctant to move away from the decades-long labour-intensive low-pay operating model that has allowed companies to widen profit margins by suppressing overhead costs.

Earlier this year Minister of Economy Rafizi Ramli, Anwar's deputy in PKR, the anchor party of the ruling Pakatan Harapan coalition, announced a plan to introduce a "progressive wage policy" as a key measure to incentivise firms to raise salaries through tax breaks and subsidies.