Misery upon misery

Poor families will experience greater hardship with hikes in the electricity tariff and the prices of essential items, says a research group.

PETALING JAYA: A research group has disputed the government’s contention that the electricity tariff hike and other price increases would not overburden the poor.Inflation was already making life more miserable to the poor even before the tariff hike, and things will get worse now, according to a statement released today by Political Studies for Change (KPRU).

It said wage increases in Malaysia had not matched with inflation rates.

“According to the World Bank Report, the real average salary increase from 1994 to 2007 was only 2.6%,” it said. “The average salary increase since the 1997 economic crisis has only been 1.9%.

“The Consumer Price Index shot up to 3% in March 2011, and then to 3.2% in April, putting the inflation rate from January to April 2011 at 2.9%.”

KPRU said the recent 7.12% increase in electricity tariffs would worsen the situation, even though the government claimed it would not affect 75% of Malaysians.

It said the government “neglected to mention” that the hike would cause an increase in the prices of food and other essential items.

“Industrial food manufacturers use large amounts of electricity, and the costs are expected to be transferred to consumers,” the statement said.

KPRU acknowledged the 2011 Robert Walters Global Salary Survey, which said that Malaysian salaries had increased by 5% to 30% this year, but it said this was applicable only to people already in comfortable positions – information technology workers, accountants, financiers, bankers and other professionals.

“In 2010, only 3.76 million out of the more than 10 million Malaysian workforce could pay the personal income tax,” the group said.

KPRU expects multiple-figure percentage increases in the prices of essential items. It said poor households would face the brunt of the price hikes.