Do not neglect M40, SMEs after subsidy removal - Guan Eng tells govt

 

DAP chairperson Lim Guan Eng has urged the government not to neglect the middle 40 percent income group (M40) and small and medium enterprises (SMEs) that are vulnerable to rising inflation after the government removed subsidies for bottled cooking oil, eggs, and chicken today. 

In a statement, the Bagan MP said the M40 group and SMEs were not getting anything or were receiving insufficient aid from the government.

The recession and Covid-19 pandemic had caused more than 580,000 middle-income households to slip back into the B40 category and many of them spend more than 25 percent of their disposable income on food, he added.

“Malaysians in the M40 group, those with monthly household income between RM4,851 and RM10,970, feel forgotten and abandoned by the federal government following the withdrawal of subsidies for cooking oil (except for 1kg packs), eggs, and chicken effective today. 

“Following the removal of subsidies, a 5kg bottle of Vesawit cooking oil that used to cost RM28 now cost RM41, it went up by 43 percent,” he said.

‘CPI not reflective of true inflation’

Lim said the country’s inflation, as measured by the Consumer Price Index (CPI) which increased 2.8 percent in May as compared to a year ago, also does not reflect the price hike on the ground. 

“The increase in the Producer Price Index (PPI), which measures the costs of goods at the factory gate, of 11.2 percent in May compared with 11 percent the previous month is probably more accurate,” he added.

The DAP lawmaker noted that B40 households earning up to RM4,850 a month get a small financial help from the government to cope with the removal of these subsidies of RM100 per household and RM50 for singles.

“For the M40, they get nothing. The government should provide some assistance bearing in mind that like those in the B40 group, many in the M40 spend more than 25 percent of their disposable income on food.

“Lest we forget, the incomes of Malaysians are also eroded by the steep decline in the value of the ringgit that depreciated to historic lows against the Singapore and US dollar, two of our three biggest trading partners,” Lim added.

‘Incompetence and red tape’

The DAP chairperson also urged the government not to leave out SMEs that are feeling the squeeze.

“They face the same predicament in not getting sufficient assistance from the government to meet rising prices.

“SMEs’ costs are further compounded by acute labour shortages caused by ministerial incompetence and bureaucratic red tape. Why impose additional hardships on SMEs when this acute labour shortage can be easily resolved with a stroke of the ministerial pen?

“The federal government must not betray its national duty to assist both the M40 and SMEs,” he said. 

The government previously announced the removal of subsidies for chicken breeders and the ceiling prices for chicken and eggs, but it later rescinded its decision and maintained the ceiling price.

A new ceiling price for chicken in Peninsular Malaysia from today has been set at RM9.40 per kg - an increase of RM0.50.

The maximum price of chicken eggs is RM0.45 each for Grade A eggs, RM0.43 for Grade B, and RM0.41 for Grade C - an increase of RM0.02.

Additionally, the government has decided to only subsidise 1kg polybag cooking oil while the ceiling price for pure palm cooking oil sold in bottles has been lifted today. - Mkini