PETALING JAYA: The recently launched National Cost of Living Action Plan 2030 (NCLAP30) will help do away with the “money illusion” syndrome where one thinks a higher income comes with higher purchasing power.
An economist and a trade chamber said such a plan is pertinent to address the cost-of-living crisis by balancing affordable essential goods and services with sustainable wage growth, higher productivity, business competitiveness, and targeted support to improve Malaysians’ purchasing power and financial well-being.
On Oct 24, the NCLAP30, a five-year Malaysian government plan, was launched by Prime Minister Datuk Seri Anwar Ibrahim to tackle the rising cost of living and improve Malaysians’ well-being.
Bank Muamalat’s chief economist Dr Mohd Afzanizam Abdul Rashid said it is commendable that NCLAP30 acknowledged the need to raise people’s purchasing power and not just nominal income.
“The two-pronged strategy (in NCLAP30) – which is raising the income and stabilising the prices – would be able to raise the real income among Malaysians.
“On one hand, you have cash transfers, subsidies and a higher minimum wage, which could help raise income in the short term. But stabilising the prices can be tricky as this involves the business decision whereby their sole existence is based on profit.
“Addressing the supply side, particularly in agricultural-based food production, is an immediate priority,” he said.
“Imagine agrofood cooperatives working together to procure seeds, pesticides, and fertilisers in bulk, thereby lowering their per-unit costs. This can help reduce production costs and improve yields, enabling more reasonable pricing for agricultural products.
“Ultimately, it is about providing these individuals with the right opportunities to scale their businesses,” said Mohd Afzanizam.
Associated Chinese Chambers of Commerce and Industry of Malaysia president Datuk Ng Yih Pyng said the effectiveness of the plan will depend on how well these measures are implemented and whether they lead to tangible improvements in people’s lives.
“For many Malaysians, the problem is not simply that prices are increasing, but that their disposable incomes are insufficient to keep pace with the cost of housing, food, transport, education and healthcare.”
He said that although exemptions offer temporary relief, clear guidelines and support for productivity, digitalisation and financing are essential.
“The long-term solution is to raise the earning capacity of Malaysians. This requires stronger investment in skills training, technical and vocational education, digital capabilities and industry-relevant qualifications.”
He said that support for MSMEs is particularly important because they form a significant part of Malaysia’s business ecosystem and employment base.
“Measures that improve supply-chain efficiency, strengthen competition, reduce unnecessary distribution costs and increase the availability of affordable housing and public transport can help ease these pressures,” said Ng.
