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Tuesday, June 21, 2011

Pakatan: ‘Up wages before slashing subsidies’

The least the government could do is set up a mechanism to channel subsidies directly to those earning below RM1,500 monthly, say its leaders

PETALING JAYA: Pakatan Rakyat MPs said the government should not scale back subsidies on essential items unless it was ready to adjust wages for workers across the board.

DAP vice chairman M Kulasegaran said with better wages, the people would not be requesting the government to provide subsidies in the first place.

“The least the government could do is formulate a mechanism that will channel subisides to specific target groups, such as low income workers. A professional like me does not need the subsidies,” said Kulasegaran.

On June 17, Parti Sosialis Malaysia (PSM) criticised the government’s decision to slash subsidies on essential goods and demanded it to be reinstated.

“Subsidies are necessary in a society where people earn low wages and healthcare and education is getting more expensive,” said its secretary-general S Arutchelvan.

Calling it a direct-handout, Kulasegaran, who is also Ipoh Barat MP said the government should channel the subsidies to those earning RM1,500 monthly and below.

However, he believed providing better wages for people was a better solution than providing subisides to the people, as the latter distorted the nation’s economy.

“But the problem is that we don’t even have a minimum wage policy. So for now, the government should continue providing subsidies for essential goods,” he said.

PAS vice president Salahuddin Ayub said the government should only consider scaling back on subsidies when Malaysia becomes a developed nation.

“When our workers earn a decent per capita income like their counterparts in developed nations, then we can slash subsidies,” said Salahuddin.

Root cause of problem

PKR vice president Chua Jui Meng said it would be impossible for those earning below the RM700 benchmark, which constitutes 34% of the Malaysian workforce, to survive without government subsidy.

“Even if a person was earning RM1,500 monthly, it would be difficult to sustain a living if you are in the Klang Valley,” said Chua.

Chua, a former health minister, said the root cause of the problem could be traced back to the 1998 Asian financial crisis, which had caused wages to stagnate over the years.

“The economic crisis had caused wages to stagnate and inflation kept soaring. People lost their means to maintain their living standard,” said Chua.

Early this month, the government raised electricity tariffs by an average of 7.12% or 2.23 sen per kilowatt hour (kWh).

Prices for natural gas was also upped to RM13.70 per British thermal unit (mmBtu) from RM10.70 and goes up by RM3 every month until December 2015, after which market rates will apply.

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