KUALA LUMPUR (Oct 21): Oposition Leader Datuk Seri Hamzah Zainuddin has called on the government to postpone the implementation of the RM1,700 minimum wage for certain sectors to protect small and medium-sized enterprises (SMEs).

During the debate on Budget 2025 in Dewan Rakyat on Monday, Hamzah (PN-Larut)  said the short timeline for the new minimum wage could significantly impact SMEs.

"We must remember that more than 90% of enterprises in the country are classified as SMEs. Enforcing the RM1,700 minimum wage, alongside the mandatory e-invoicing system, could drive up operational expenses for these businesses," said Hamzah.

While expressing support for the wage increase, he urged the government to consider delaying its enforcement for certain sectors to give SMEs more time to adjust.

"If the government is determined to push for the minimum wage, they should at least consider providing assistance to SMEs, perhaps in the form of wage subsidies," Hamzah added.

When presenting Budget 2025 in Parliament last Friday, Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim announced that the minimum wage would be raised from RM1,500 to RM1,700, effective Feb 1 next year.

However, small businesses with fewer than five employees will be temporarily exempt from the new requirement until Aug 1, 2025.

Meanwhile, Hamzah urged the government to prioritise the development of Malaysia's rare earth elements (REE) industry, emphasising its significant economic potential as global demand is expected to rise sharply by 2030.

He noted that Malaysia has rich deposits of REEs such as neodymium and praseodymium, which are critical for electric vehicle batteries and other high-tech products, valued at US$60,000 (RM258,150) per metric tonne.

"Significant REE deposits have been discovered in Kedah, Kelantan, Terengganu, Pahang and Perak. It’s clear that a strategic plan is needed to harness these resources for the benefit of the country," Hamzah said.

He also suggested the government provide financial support, in the form of loans and grants, to help local companies build expertise in REE exploration. 

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