DAP calls for price stabilisation fund to cap inflation

 

DAP had reiterated its calls to the government to establish a price stabilisation fund to cap inflation and the increase in food and commodity prices.

Its chairperson, Lim Guan Eng alleged that without the price stabilisation fund, strengthening of the ringgit, resolving the severe worker shortage, and ending the government’s policy flip-flops, the cost of living will continue to escalate.

In a statement, he lamented the government’s refusal to set up a RM5 billion Price Stabilisation fund, which was confirmed to him in a parliamentary reply by the Finance Ministry.

“Instead, RM1 billion is provided to chicken and poultry breeders to stabilise chicken and egg prices at controlled prices, until August 2022. Despite that, supply shortages are still expected because chicken and eggs are still sold below cost.

“This is due to the rise in global food production inputs such as maize (14.8 percent), wheat (60.9 percent) and soybean (19.9 percent), which are the largest compositions in the preparation of chicken feedstuffs has caused chicken prices to increase by 17.2 percent. Similarly, pork prices went up by 14.6 percent in June as compared to 10.2 percent in the previous month,” he said.

DAP chairperson Lim Guan Eng

Lim said the the government continued to disclaim any responsibility by blaming soaring food prices on escalating food production inputs due to the war in Ukraine, supply shortages, the disruption in the supply chain caused by the Covid-19 lockdowns in China and high logistic costs.

“However, no mention is made of the negative impact of the depreciating ringgit and the acute labour shortage in hiking up the inflation rate,” he said.

Department of Statistics Malaysia (DOSM) revealed yesterday that Malaysia’s Consumer Price Index (CPI) increased by 3.4 percent year-on-year (y-o-y) to 127.4 in June 2022 from 123.2 in June 2021, surpassing the average inflation in Malaysia for January 2011-June 2022 period by 1.9 percent.

DOSM chief statistician Mohd Uzir Mahidin said food inflation increased by 6.1 percent and remained the main contributor to the rise in inflation during the month.

Howeve,r Lim alleged that the data does not reflect the actual situation due to controlled pricing of certain essential items.

Lim added that the declining ringgit has only added import costs to businesses whilst the acute labour shortage has not only adversely affected economic growth.

“The ringgit’s depreciation against two of our three biggest trading partners in the US and Singapore, will only cause inflation to spike up.

“An indicator of how bad the current situation is can be seen by the price of 5kg of cooking oil at RM19 under Pakatan Harapan, but now it is sold at more than RM45.

“The government had tried to imply that whilst the inflation rate has increased to 3.4 percent in June, it is still lower compared to Singapore’s 5.6 percent.

“Such comparison is meaningless when the Purchasing Power Parity (PPP) per capita of Singapore is almost 4 times that of Malaysia,” he said.

It was reported that the ringgit fell to a five-year low on July 19, making it the weakest against the US dollar since March 2017. - Mkini