The semi-monthly payroll will be introduced on a pilot basis for the staff at the Prime Minister’s Office (PMO) and the Ministry of Finance (MoF), starting January 2018.

The rationale behind the twice-a-month salary payment is to increase the effectiveness of cash flow management so that employees can better regulate their spending, while helping to sustain commercial and economic activities in Brunei.

According to Dr Haji Abdul Latif bin Haji Chuchu, President of the Federation of Brunei Malay Entrepreneurs (PPPMB), the initiative will not give much benefit to government servants with a salary below B$1,000. The fortnightly salary disbursal will make it difficult for them to manage their finances due to commitments such as car loan and housing loan.

“But, public servants with a bigger salary will not be affected by the move,” he said.
Dr Haji Abdul Latif suggested increasing the salary of public servants and introducing a minimum wage of B$1,000.

Haji Halim, a businessman, said the move has advantages and disadvantages.
“The initiative will give a pinch to low income earners who will find it difficult to manage their wages. But it all depends on one’s financial discipline. In my opinion, monthly payroll offers a better deal as employees can manage their funds properly, although there is a temptation to buy this and that, compared to wages paid twice a month.”

He added that a public opinion survey should be done before implementing the new salary payment system.

Shahrani, a government servant, believes that the move is beneficial, especially if cash needs to be withdrawn for emergency purposes.

“It will teach us to control our expenditure, instead of spending beyond our means,” she said. “One must exercise strong willpower in order to resist the urge to overspend.”

Mohammed, another public servant, said the initiative would save Bruneians from becoming cash-strapped for two or three weeks after receiving their salary, which in turn would compel them to turn to loan sharks or unauthorised money lenders with huge interest rates.

“Some people are in the habit of spending as soon as their salary is cashed in, without any thoughts for tomorrow,” he said. “This move should help tackle the habit of borrowing.”

Others said that this initiative would prevent people from putting off the payment of their debts, with their salary being deposited on the 15th day of every month.

“It may affect low-income earners, as they may have to divide their expenses into half for the purchase of household provisions,” they said.

“Single people might not be affected, but those with large families would find it difficult to pay off their loans and utility bills.”

Another person commented, “It may take some time for Bruneians to get used to such an initiative, just as many were wary of the Kiarong roundabout at first. More awareness needs to be disseminated.”

Simon, who is a teacher, said, “I think this move can particularly benefit those who have difficulty controlling their spending. This would help them get through the whole month instead of exhausting their salary within the first week.

“It will also be good in a business point of view as customers can frequent businesses not just in the beginning or end of the month. We could potentially see vibrant business activity throughout the month, if this policy is implemented throughout the country. Business houses will be able to do mid-month promotions which will increase economic activity in Brunei.”

However, he noted that one of the potential drawbacks of the move is that some people could encounter difficulty in servicing their loans.

“Another drawback is that it will reduce the capacity to save for emergencies such as an urgent repair, a health issue, an accident or perhaps even a police fine,” Simon said.