Postponing toll rate hike to 2022 a relief as it eases public burden

Weighing in: Prof Yeah welcome the move to delay toll hike.

PETALING JAYA: Postponing the toll hike to 2022 has given households and businesses breathing room amid the crushing pandemic.

Professor of Economics at Sunway University Business School Prof Dr Yeah Kim Leng said as the country was currently in the early stage of economic recovery, the toll relief could be viewed as a fiscal measure to sustain the disposable income of households and businesses.

In turn, the toll savings when spent or invested by households or firms would have a multiplier effect on the economy, thereby strengthening the recovery momentum, he said.

“While the size of toll spending and its multiplier effect may be small relative to other household consumption items, an equally important aspect is the effect of the toll subsidy on reducing the upward pressure on consumer price inflation, which is expected to rise above trend this year, ” he said.

On Friday, Works Minister Datuk Seri Fadillah Yusof said the toll hike for three major highways, which was supposed to take effect on Jan 1, had been postponed to next year.

The toll hike freeze will be extended to major highways and several bridges.

It is expected to cost over RM2bil as the government would have to compensate highway concessionaires to postpone the hike due this year.

Prof Yeah said with the postponement, businesses would be able to keep down transport cost, enabling them to maintain the existing prices of goods and services.

“Given that transport is a significant component of the costs of production and distribution of goods and services, keeping the toll rates unchanged will help to keep a lid on the country’s inflationary pressures and inflation expectations.

“For individual users of the highway, the money that would have been used to pay for a higher toll can be saved or used for other expenditure, ” he said.

Prof Yeah added that although the government was projecting growth to range between 6% and 7.5% this year, the downside risks remained considerable, therefore delaying the toll fare hike to next year was a better move.

“With the economy remaining soft and the pandemic resurging, implementing the toll hike next year when there is greater certainty of economic buoyancy is more prudent, ” he said.

The Federation of Malaysian Consumers Associations (Fomca) chief executive officer Saravanan Thambirajah said any price increase for products and services would impact the B40 group the most.

“Many people rely on their own transportation.

“The toll fare hike delay will help people save money so they can focus more on buying and putting better quality food on the table, ” he said.

Saravanan added that Fomca was, however, concerned over the large payout to concessionaires, saying that this would burden the government and that toll operators should absorb some cost out of goodwill.

“Last year, banks granted a moratorium on loans to consumers and this really helped a lot of people; this should be emulated by toll operators.

“They should give a moratorium to the government or even absorb some of the cost rather than make the government pay billions, ” he said.

Housewife Prema Pekasam, 49, who runs a home-based catering business on the side, is relieved that the hike on toll rates has been postponed as she plies the highways frequently to deliver food to customers.

Prema, who makes three or four deliveries per week to locations all over the Klang Valley from her home here, absorbs toll fares instead of passing on the charges to her customers.

“I don’t charge them for toll because it is a turn-off for customers when they see that extra cost. Instead, I charge between RM10 and RM15 for delivery, then absorb the toll fees.

“I don’t use delivery firms because I want to make sure my food arrives in perfect condition to my customers.

“So I’m really glad that the toll rates are not increasing this year. It helps because whatever money I earn, I pump back into my business, ” she said.

Jeff Yong, 45, is also glad that there will be no increase in toll charges this year as many Malaysians are struggling during the pandemic.

“Not only that, if toll charges increase, it may cause delivery charges for parcels to increase too.

“As we know, online purchase has already become the new norm of our life today and any increase in charges will burden us, ” said Yong, who is a CEO of a beauty and grooming retail chain.

He added that although the delay would heavily burden the government, this was an opportunity for the administration to show that the people’s welfare and livelihood came first amid the challenging times.

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