Coping with higher costs of living


  • Last Man Standing
  • Friday, 10 Jan 2014

Increasing costs of living was one of the main factors why many of the rakyat have voted for the Opposition in the last general election. 

Despite Barisan Nasional having won the elections, the Federal Government has introduced further unpopular moves to cut subsidies leading to a series of price increases and higher costs of living for the people. 

It first began in September with the reduction of the fuel subsidy by 20 sen, followed by the abolition of the sugar subsidy by 34 sen per kilogramme and as the year 2014 begins, electricity tariff will go up by an average of 15% to 16.9%. 

These are likely to lead to higher prices in almost every item as most businesses, if not all, will pass on the burden of these increased costs to us, the end consumers. 

Like many ordinary Malaysians, coping with these higher costs of living will not be easy. In fact, unless there is a similar increase in our incomes, the surging living costs will make 2014 very, very painful for us. 

From the government’s perspective, although these moves are unpopular, they may be necessary to improve the state’s finances and to make our economy more efficient in the long run. This is particularly true in view of fiscal risks identified by global credit rating agencies such as that of Fitch Ratings. 

In the haste of correcting and improving the economy, however, it appears that the needs of the people have been neglected, as prices have been rising faster than wages.  Judging by how things are now, prices will only continue to rise at an even faster rate. 

To make things worse, not only that the burden of these price hikes are passed onto consumers, certain unscrupulous businesses are taking the opportunity to reap in more profits by increasing prices of goods disproportionately and excessively. 

One such example is where restaurants and coffee shops which charge say 50 sen more for drinks on the basis that sugar prices have increased by 34 sen a kilogramme when they do not even use a kilogram of sugar to prepare the drinks.

This is merely a possible scenario with the small businesses, what about the bigger businesses which we do not even know their costs? 

As such, a strong price control mechanism, in particular a strong enforcement team, must be put in place to keep the prices of goods in check. And next come the question of whether or not the burden of these subsidies reduction should be borne solely by the end consumers, in particular, in industries which are monopolised, like the energy industry. 

Since the government is now transforming the economy toward a more market based prices for commodities and energy, perhaps it is time that the government breaks up the monopoly of Tenaga Nasional Berhad and allow other players into the energy industry, hopefully resulting in lower prices and better services for the consumers. 

While price hikes are inevitable for the sake of our economy, the least that can be done is to ensure that the burden of these hikes will not be borne solely by  the end consumers.

These are merely some suggestions which the government may study given the growing voices on the pain of the increasing costs of living. 

To live up to its motto of “People First, Performance Now”, surely all efforts must be taken not only to reduce the costs of living but provide a better standard of living as we march closer to Vision 2020.

> The views expressed are entirely the writer's own. 

 


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