Malaysian PM Najib promises $378 million raise for civil servants ahead of polls

FILE PHOTO: Malaysia's Prime Minister Najib Razak walks beside his deputy Ahmad Zahid Hamidi during the United Malays National Organization (UMNO) general assembly in Kuala Lumpur, Malaysia December 7, 2017. REUTERS/Lai Seng Sin

KUALA LUMPUR (Reuters) - Prime Minister Najib Razak promised on Wednesday 1.46 billion ringgit ($378.04 million) in salary hikes to Malaysia’s civil servants, a key vote bank for the ruling coalition in a looming general election.

Malaysia’s 1.6 million civil servants, most of them ethnic Malays, have traditionally been supporters of the ruling Barisan Nasional coalition. However, the rising cost of living has been a concern for many, with some ruling party officials warning that they could turn against the party if the issue is not addressed.

Scandal-plagued Najib needs to consolidate support for his coalition to stave off an unprecedented challenge from his former mentor turned opposition leader, Mahathir Mohamad.

“The government has agreed to increase the salaries amounting to one service year for all 1.6 million civil servants ... with an additional 1.46 billion ringgit from July 1,” Najib told a gathering of civil servants in the administrative capital, Putrajaya.

Najib promised a one-time cash payment of 1,500 ringgit in October for civil servants and 750 ringgit for government retirees as part of the government’s 2018 budget.

Civil servants saw a salary hike between 7 and 13 percent in 2012 ahead of elections the following year.

Najib faces a tough contest in the upcoming polls - which could be called in days - amid a multi-billion dollar scandal at state fund 1MDB. Najib and the fund have denied any wrongdoing.

Parliament approved a plan last week to redraw electoral boundaries, a move that the opposition and critics say will help Najib’s coalition retain power.

Reporting by Rozanna Latiff; Editing by Paul Tait