Help manage cost of living

IT HAS been one month since the government replaced the hugely unpopular goods and services tax, reverting back to the Sales and Service Tax (SST) regime.

While consumers were hopeful that prices of goods and services would come down, unfortunately this did not really happen, evident from the fact that the Ministry of Domestic Trade and Consumer Affairs continues to receive some 2,000 complaints on issues related to SST daily.

On the contrary, prices are expected to rise further from October when suppliers begin to pass on the SST to consumers, continuing the high cost of living debate, which I doubt the government will be able to contain, no matter how much enforcement activity is implemented. Truth is, the landscape in which we exist has and will continue to change.

While the Price Control and Anti-Profiteering Act regulates businesses profit margin, it is not able to control business cost increase, which is influenced by various factors, from operations to production, supply and retail.

One important factor that greatly influences cost is the strength of our currency value against the US dollar and we all know that Malaysia is still heavily reliant on food imports to feed the population.

To contain price increases the government must strengthen the value of our currency but unfortunately this may have a reverse impact on our exports where Malaysia may lose its competitive edge as described by the prime minister when justifying a RM50 increase in minimum wage.

The other impact with a strengthened ringgit is that the government will lose its commodity tax revenue, especially petroleum tax. We are trapped where on one hand we are trying to manage the cost of living and the other, promoting and maintaining competitiveness.

The solution to this problem is for the government to implement strategic social security initiatives, equitably channelling revenue, which will help ease the cost burden of targeted segments of society that, among others, should include students, pensioners, senior citizens, single parents, abandoned, displaced and poor families.

A lesson can be learnt from the myriad of initiatives implemented by the Selangor government with improvements and it is hoped that these initiatives could be rolled out nationwide by including them in the upcoming national budget.

Darshan Singh Kuala Lumpur