Thursday, October 06, 2005

Inflation

I am disappointed with our government latest budget. Nothing is done about our rampant inflation. In the budget statement, it says that the government will continue with its current monetary policy. Meaning Bank Negara will continue to print money to finance the deficit, which will result in continuing high inflation in the medium term. Our money will definitely worth less in the coming years, and the hard working Malaysians toiling in factories and estates will bear the brunt of higher prices.
More money is being ploughed into unfinished, public and agricultural projects will benefit us in the future, which are okay. Supply side measures will bear result in 2-3 years time, when those projects are finished. Those are medium term measures, but we must also do something about inflation now. Talking about it in the media is good and well, threatening to prosecute poor trader is not okay. If thoase traders cannot make a living because of marginal or no profit, they might close shop altogether. If you go to the market, you might notice that most of these traders are Malays.
What do you think would happen when most traders, farmers and producers close business?
We would have shortages of basic food and prices would increase. So in the long term, it is not good. Did we notice that the price of chicken is high lately? That because after the last bird flu scare 18 month ago, a large number of chicken farmers gone bankrupt because of low prices. Most of these bankrupt chicken farmers were Malays too. Now we bear the brunt of higher chicken prices.
I believe the government is fighting inflation at the wrong end. Instead of targeting small traders and businesses, we should be targeting medium and high income consumers. That group of people who have a lot of discretionary spending money to splash about. Increase taxes for medium and higher income earner, so that we can balance the budget. Another thing we must do is remove petrol and diesel subsidy, but provides help directly to the low income and the poor in the form of financial help. It is well documented that blanket subsidy system on petrol and diesel that we have missed the target group and benefit the rich. How much motorcycle riding factory worker spend on petrol every month compared to Mercedes driven company executive?
Yet the lower income groups are the ones moaning the loudest. That because higher percentage of their income goes to petrol. If we provide financial help to them directly, straight to their bank account, we would solve the problem.
I support measures announced before the budget in September, that we will increase financial help for the poor, those unable to work, single mothers and the needy.
A year ago I renew acquaintance with a school friend who is now a single mother supporting a number of school age children without any financial help from her former husband. She only gets RM350 a month from Jabatan Kebajikan Masyarakat. Sounds good? But the JKM paid her quarterly in arrears. Meaning the payment for January, February and March is paid in mid April. Yes we might want to give a message that the government has no money, but these people might starve waiting.
Meanwhile we devise another tax cut for the higher income group simply because they are our main supporter who voted for BN and hopefully will return us again to the parliament.
Much has been said about our wealth as a nation. Yet when taking care of the poor, we are far behind the developed nations, far less the utopia of Islam Hadhari. See our balance of payment; we have been in surplus continuously since early 1998 if I am not mistaken. Our foreign reserve has reached USD75billions, some of our multinational corporations are on acquisition trail in the region and worldwide, turning low yielding cash reserve into profitable investment and future revenue. Lately the government even encourages GLCs to invest more in the region in an effort to reduce foreign reserve, i.e. transforming foreign reserve into foreign investment.
Drive to any kampung and we are presented with modern bungalows with 3-4 cars in their yard. Yes, some of us did well, but look deeper, there are people in our midst who have difficulty coping with higher costs and surviving on low wages. I had the opportunity of meeting with the poor, those people who are paid a meager RM350 a month for her 8 hour a day, 6 days a week cleaning job. Why would she work for that amount of money? Because she is in a weak position, in a country with no legislated minimum wage, the weak is in no position to bargain about her wage, much less to demand higher salaries, her skills is easily replaceable with cheap imported foreign labour.
What about people who are unable to work? Those people who are incapacitated, sick or just simply too old, we would say we feel sorry for them, donate a few ringgits to atone our guilt, then we forget about them. Do we have a better way to take care of our poor, unfortunate citizens? Yes, from time to time we round up our beggars and drug addicts and house them in rehab, called Serenti. That’s about it.
We have the tendency to solve our problems by sweeping them under the carpet or tikar, and we forget about it. As long as we don’t see it, all is well and dandy.

1 comment:

toksema said...

Your comment and suggestion on belanjawan is better and wiser compared to dr.bakri musa. keep it up.