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Wednesday, July 16, 2014

‘Prices just keep rising’

The economic situation for the ordinary people is certainly not improving.
COMMENT
price_up_300The increase from 3.00% to 3.25% of the OPR (Overnight Policy Rate) on July 10 means that one has to pay higher interest on servicing one’s personal loans, housing and car loans and credit card payments.
Former Kuala Selangor MP who is now the Executive Director of the PAS Research Centre, Dr.Dzulkefly Ahmad is of the view that the situation will further burden the ordinary rakyat.
“The cut in subsidies causing the price of fuel and electricity tariff to go up, the increase in OPR recently and finally the GST (Goods and Services Tax)  to be launched on April 1 next year is a three-pronged assault on the ordinary citizens’ pockets,” said Dr.Dzulkefly.
He informed this columnist that until the end of year 2013, the household debt had soared to 86% amounting to more than RM850 billion of the GDP (Gross Domestic Product).
The economic situation for the ordinary rakyat is certainly not improving.
Just look at the sub-headline in a local English newspaper dated July 11 2014: ‘Husni: Govt. to decide later whether to exempt RON95, diesel from tax’.
This report stated that Second Finance Minister Ahmad Husni Hanadzlah informed that the government will decide whether RON95 and diesel will be exempted from GST when the subsidy rationalisation programme is completed by the fourth quarter of this year.
Husni was also reported to have said that the full list of zero-rated and tax-exempt items will be gazetted in August and this will give a clearer picture of the goods and services that will be GST-free.
This then begs the question of why is it called ‘the full list’ when the decision has yet to be made on RON95 and diesel.
“From here it is obvious that the government is full of spin and double-talk as a full list will be taken to mean complete listing and thus implies that RON95 and diesel will not be given the GST-waiver.  The government saying that they will decide ‘later’ shows that they are afraid to announce the bad news to the rakyat,” opined PAS Shah Alam MP Khalid Samad.
A street survey conducted by this columnist in KL involving more that 25 members of the general public had elicited the same comment: the government is short of funds.
A banker friend who spoke on condition of anonymity remarked that the economy this year is still good but there is already a big question mark for next year.
“We are now tightening up our credit for fear of NPLs (non-performing loans) and therefore it would not be that easy to obtain a loan from us these days.  I won’t say much about the current economic climate except to use this phrase: ‘You can’t cover an elephant with a coconut leaf’.  This sums up the situation accurately, nothing more, nothing less,” said the banker.
These days too the Chinese are tightening their belts even during the current Mid-Year Sale season.  The Chinese are known to go for these type of sales but now the mood from the Chinese is not overly enthusiastic.  It has been dampened since last year’s Mid-Year Sale which was held after the 13th General Election.
Whatever it is, economic figures can always be slanted this way or that to portray a favourable situation.  But it is the situation on the ground which refers to the average citizen’s pockets that really matters most to us.
One thing for sure is that hard times are coming.
Meals in the Chinese coffeeshops in Kepong Baru has gone up from RM4.80 beginning this year to RM5.50 or RM6.00 with effect July 1 and a box of Earl Grey tea has recently gone up from RM15.50 to RM16.80 or RM17.00 depending on the supermarket.
Prices of milk powder, canned food, fresh produce, meat and fish and dried foodstuff have all gone up since mid-June.
Now this is the reality – the economy of the citizens’ pockets.  The rakyat is not bothered with what this research house or rating agency or that economic analyst is saying.  At the end of the day, prices have gone up, our pockets are hit and it is the money in our pockets that counts.
Truly it is impossible to cover an elephant with a coconut leaf although attempts are being made to do so by certain quarters.
Salena Tay is a FMT columnist

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