JULY 9 — I write to put in context the massive coverage given to government-linked companies (GLCs) personnel salary that everyone has concluded is high and therefore needs to be reduced. This also includes government-linked investment companies (GLICs) salaries which need to be reviewed.
Well, GLCs and GLICs in Malaysia are loosely termed as one cannot say Employee Provided Fund and Permodalan Nasional Berhad as being GLICs as the funds do not belong to the government but depositors as compared to Kumpulan Wang Persaraan whose funds belongs to government. This discussion is for another article for another day.
In spirit of disclosure, neither I nor any family members work in GLCs but have friends and family of friends who work in GLC and therefore I can contribute context to this.
As always, those who are outside GLCs are watching with glee all these accusations while those working in GLCs will be seething with anger and self-righteousness with deserved defence.
Whatever the complaint, GLCs have succeeded in advancing the Bumiputera agenda better than any other government initiative as it has created a middle class Bumiputeras leading some top Bursa Malaysia listed companies which were not there when the New Economic Policy or NEP was first introduced.
Let’s not tamper with that just because some apparent abuse has taken place. Deal with the abuse and not paint all GLCs with the same brush.
In my opinion, one must always compare and contrast the GLC in question and examine the facts of the case to ascertain if high pay and remuneration is warranted.
For this, we must separate those GLCs that naturally are profitable due to money literally coming out of the ground and those which have to work very very hard to attain profitability.
Maybe the best compare and contrast of this will be Petronas and Khazanah.
Petronas is guaranteed to be profitable as the oil keeps rolling while Khazanah profit is a bit more suspect although it has some juicy blue chip companies in its stable. You can shut the whole Twin Towers for a whole month and the till will keep tingling away as the money will still roll in for Petronas.
I admit, this is a very simplistic comparison but it is sufficient just to make my point.
Petronas is in charge of our oil reserves and monetising it while Khazanah is a government investment arm although it was originally meant to be a sovereign fund. It cannot be termed a sovereign fund as unlike Temasek and Government Pension Fund of Norway which regularly gets fund injection from government budget surplus, Khazanah has to go to market to borrow to expand.
Similarly EPF, KWAP, PNB and Lembaga Tabung Angkatan Tentera are “cash” rich as they get continuous inflows from contribution and it will be easy for them to carry out investment activities. If one has to borrow and invest then a tragedy like 1MDB can happen.
So if Khazanah’s personnel get paid more, do they deserve it or do they not? Well at least they did not leave our nation with RM45 billion debts without much asset backing like 1MDB.
In any case, what is more? Who decides what is more, surely this cannot be left to civil servants with guaranteed service tenure and pension to decide.
There has been comparison with civil service personnel or even ministers which is really comparing apple with kedondong.
Civil servants or ministers may get less basic pay but has anyone tabulated all the tax free perks that are awarded, from driver to car to gardeners and so on? I remember many years ago the Prime Minster's Department published a list.
Even one term Member of Parliament (MP) gets pension these days and apparently if you have been an MP and a minister you get two pensions. Why is no one talking about this?
GLC staff is mostly on EPF which is not anywhere as lucrative as pensions given to the civil service and ministers. If EPF is better than pensions, civil servants would have jumped headlong and agree when there was suggestion of doing away of pensions and replacing it with EPF for all civil servants.
Civil servants get pensions for life and receive golden handshake when they retire in the form of accumulated unutilised holiday over their tenure but paid on last drawn salary which can run to millions on retirement. Upon retirement they tend to get plump chairman or director position in government bodies or GLCs.
Many senior civil servants are even given land at nominal cost by the government. Many get to go and do their Masters and Ph Ds on taxpayers cost as if it is their right.
Do GLCs staff enjoy this?
Many senior civil servants sit on many boards and pocket the director’s allowances but some GLC staff who sit on board on behalf of the company do not receive these allowances.
Therefore, before we pass judgement on whether GLC staff are being paid high salaries please tabulate all the remuneration and benefit of a GLC staff both in service and retirement and compare to that of the civil service and then make an informed decision and not wild guesses.
There has been a suggestion that all GLCs should be privatised and it will be better for economy and consumers. Really?
Telecommunications is mainly in private hand. The service and cost to customers are among the highest in the world with lowest broadband speed.
Our toll collection (apart from PLUS) is in private hands, do you see toll reducing?
Our long distance buses are in private hands. Need I say any more?
In fact many of services which was stellar in government hand such as Malaysian Airline System or sewerage services or local government rubbish collection deteriorated to such a bad extent when they were privatised.
Do the ministry officials really know better than the “overpaid” professionals at GLCs. I would say of course not. Many of the GLCs have performed better without interference from the government.
Just look at the total catastrophe of the 1MDB saga which was being run by the previous lot from Prime Minister’s Office.
The Star reported, as the portfolio of Khazanah increased in value, the leadership team grew. Its realisable asset value has grown from RM63.7bil to RM157.2bil between 2005 and 2017. Net worth adjusted, which measures the value created striping out liabilities, grew to RM115.6bil as at end-2017 from RM40.5bil a decade ago.
Can the mandarins at the ministry achieve this on their own without the input of professionals? Overpaid or otherwise.
* This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.
