Mired under debt post-Raya: Help citizens in distress, govt urged

A report in Utusan Malaysia states that approximately 50% of low-income households are expected to be burdened with personal loans. This highlights weaknesses in the welfare policies of the Malaysia Madani government.

Although the government often paints a rosy picture, claiming that the country's economy is improving and assuring that the majority of the rakyat, especially those from low-income groups, will not be affected by the rationalisation of diesel subsidies and the implementation of several new taxes, the reality on the ground is starkly different.

It is obvious that people are increasingly burdened by financial problems and the high cost of living, to the point where they are forced to take out loans just to celebrate Hari Raya Aidilfitri, with some at risk of facing bankruptcy.

The government also cannot deny the clear facts and data. Household debt has risen from RM1.57tril at the end of 2023 to RM1.63tril in December 2024. Compared to 2018, when household debt was RM1.19tril, this means the country's household debt has surged dramatically over the past six years.

Sadly, every time there is a report about the rise in household debt, the Ministry of Finance or Bank Negara always claims that the situation is "still under control." The question is, until which point will this problem be considered "out of control"? Wouldn’t it be better for interim measures to be taken now to tackle the increasing financial burden on people and the rising cost of living?

Additionally, it is feared that the increasingly popular BNPL (Buy Now Pay Later) trend traps many more in the "debt trap," directly proving that the purchasing power of Malaysian consumers is steadily declining.

Therefore, once again, we urge the government to postpone several policies that distress the rakyat, such as the expected electricity tariff hike in the middle of this year, until consultations and dialogues can be held with stakeholders such as consumer bodies, business associations, and welfare organisations to identify shortcomings in government policies. This will allow for the formulation of stronger policies to ensure that no one is left behind in the government’s socio-economic safety net.

This is because the Madani government is often seen as having failed in obtaining feedback from stakeholders before formulating policies, as evidenced in the implementation of the Central Database Hub (PADU), the introduction of EPF contributions for foreign workers, diesel subsidy rationalisation, and so on. Ultimately, the weaknesses in these policies not only burden ordinary citizens but also inflict a loss of investor confidence in the government.

Government agencies must also fortify efforts to enforce the law, particularly the Festive Season Maximum Price Scheme (SHMMP), to ensure that irresponsible parties do not take advantage of price hikes to profiteer excessively, whether they are traders, wholesalers, or suppliers.

The government is also urged to give serious consideration to the proposal by the MCA President during the recent Dewan Rakyat session to raise the individual tax relief rate from RM9,000 to RM12,000, which has not been reviewed in nearly a decade.

The re-implementation of GST at a lower rate is also one of MCA’s proposals to alleviate the financial burden on the public, and it is hoped that the Madani government will reconsider this proposal.

The government can no longer turn a blind eye to the reality on the ground and hide behind sweet numbers that do not reflect the real situation and challenges confronting citizens. Across the country, the majority of people have struggled with mounting financial pressures over the past six years.

Datuk’ Dr. Monna Ong

MCA Public Policy and People’s Livelihood Research Advisory Committee Chairperson