Leaders promise to address cost-of-living concerns

Prime Minister Najib Razak, the Umno president, delivering his keynote address at the 69th Umno General Assembly in Kuala Lumpur yesterday.
Prime Minister Najib Razak, the Umno president, delivering his keynote address at the 69th Umno General Assembly in Kuala Lumpur yesterday.PHOTO: THE STAR/ASIA NEWS NETWORK

Even as Umno's leadership fracas dominates the headlines and twin financial scandals hang over the Prime Minister's head, the ruling party's leaders assured delegates at the annual assembly that the government is addressing concerns over the rising cost of living.

For ordinary Malaysians, however, the promises offer no silver lining during these tough times.

"Business has slowed by half this year. If I'm still losing money by next year's Hari Raya, I'll just close up shop and head back to my farm," said clothes vendor Mohd Harif Jamin, 46.

Indeed, all is not well financially for the average Malaysian.

Last year, average monthly household income was RM4,585 (S$1,508), with the mean household expenditure at RM3,578.

Malaysia has the highest household debt in Asia, amounting to 87.9 per cent of the gross domestic product as of December last year.

Prime Minister Najib Razak, in his opening speech yesterday, promised to alleviate the people's burden through government programmes such as the cash handout scheme BR1M and affordable housing projects.

He acknowledged that housing and cost of living are "huge issues and have become the people's main worry".

Consumers have held back from spending since Malaysia implemented a 6 per cent goods and services tax (GST) in April.

Shopping malls in Kuala Lumpur remain packed during weekends. But few people are carrying shopping bags, a telling sign which reinforces official data showing that private consumption has fallen by more than half since the start of the year.

In his speech, Datuk Seri Najib defended the consumption tax, arguing that it was a necessary tool to keep the government's civil service running.

Malaysia's 1.61 million civil servants also make up the bulk of Umno's supporters, and they help ensure the party garners sufficient votes to stay in power.

Despite the assurances given by Mr Najib, Malaysians are unlikely to open up their wallets.

Driven by concerns over a weaker economy, declining ringgit and political instability, consumer sentiment has declined to its lowest in a decade, according to a survey released last month by Nielsen Malaysia.

Besides implementing the GST, this year the government raised toll rates and public transport fares in urban areas - namely Kuala Lumpur and Selangor.

October inflation rose 2.5 per cent from a year ago, after holding steady near flat earlier this year.

Bank Negara Malaysia expects inflation to peak in the first quarter of next year, potentially hitting between 4 per cent and 5 per cent.

On Wednesday, Umno Youth chief Khairy Jamaluddin rejected further price hikes.

"Enough is enough. Stop these price hikes; no more increases," Mr Khairy said to applause during his opening speech.

A version of this article appeared in the print edition of The Straits Times on December 11, 2015, with the headline 'Leaders promise to address cost-of-living concerns'. Subscribe