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Tuesday, December 31, 2013

Tighten your belt and brace ourselves for a hellish 2014

In a bid to to bring the country's deficit under control, the government has moved to cut subsidies on a number of essential items.

The government calls the move as "a necessary short-term pain" for sake of the country's long-term fiscal health.

However, these increases have created cascading effects, causing the prices of other good and services to increase as well because of the rising costs from the initial hikes.

To date, these are the items that have already increased in price:

1) RON 95 petrol – Increased from RM1.90 to RM2.10 per litre on Sept 3.

2) Diesel – Increased from RM1.80 to RM2.00 per litre on Sept 3.

3) Sugar – Increased from RM2.50 to RM2.84 per kg on Oct 25

For only three items, it isn't too bad. But what's going up next year?

1) Highway toll charges (In West Malaysia)

The government has indicated that higher toll charges is a given, but has not given a deadline as it seeks to find a mechanism to minimise the impact.

Minister in the Prime Minister's Department Abdul Wahid Omar said the government needed to allow the increase to comply with its agreements with the highway concessionaires.

According to reports, the increases are expected to be between RM0.30 and RM1 and involve 13 highways.

2) Taxi, bus, train fares

The Land Public Transport Commission (Spad) has announced that it is considering an increase in the fares for the light rail transit (LRT) and Kereta Api Tanah Melayu services.

It's argument is that fares have not been increased for 10 years now, and added that any hike will only come in the second half of 2014.

Spad said it is also reviewing the taxi and bus fares, but the Johor Taxi Association had revealed, after its discussions with Spad, that the increase will come into effect in February.

The Union of School Bus Associations has also indicated that it may impose a 40 percent surcharge on bus fares beginning next year, citing diesel the price increase.

3) Electricity

From January 2014, electricity in peninsula Malaysia will cost 15 percent more, from RM33.54 to RM38.53 per kilowatt and 16.9 percent more in Sabah and Labuan, increasing from RM29.52 to RM34.52 per kilowatt.

4) Ice

If you need to tighten your purse, "milo ais kurang manis" isn't going to cut it, as the ice will also have to go. The industry cites rising cost from diesel and electricity hike.

The 26-member Tube Ice Manufacturers of Kuala Lumpur, Selangor and Putrajaya announced that from January, a 50kg block of ice will cost about RM12.50 instead of RM10 and a 10kg bag of tube ice will cost about RM3.50, from RM3 now.

5) Stationery

The Federation of Stationers and Booksellers Association of Malaysia announced that stationeries are expected to see an increase in prices of between 20 and 30 percent by March. It cited increased costs from the fuel price hike.

6) Taxes

Klang Valley folks will have to fork out more money to their local government next year as the Kuala Lumpur City Hall (DBKL) unveiled a revision of property valuation in the capital which will results in a hike in assessment rates.

Even though it has announced that the assessment rate for residential property will be reduced from 6 percent to 5 percent, the upward revision of valuation up to 300 percent will still see an overall increase of assessment fee.

Likewise, the Selangor government announced that business licence fees will go up, up to 400 percent effective next year.

7) Temperature

Yes, you heard right, from 21 degrees Celsius to 24 degrees Celsius to be exact.

The Malaysian Association for Shopping and Highrise Complex Management called on its 400-odd members to set air-conditioning at 23 to 24 degrees Celsius from current temperatures of as low as 21 degrees Celsius.

It said the move is to counter the electricity tariff hike.

by Nigel Aw

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