Date of publication: Oct 23, 2013
Section heading: Main Section
Page number: 013
Byline / Author: By Zarina Zakariah; Balqis Lim
KUALA LUMPUR: FOR the 2014 Budget, to be tabled by Prime Minister Datuk Seri Najib Razak on Friday, issues related to the cost of living will be the main concern.
Skyrocketing prices of houses, the impending implementation of the goods and services tax (GST) and improving their purchasing power were issues that Malaysians hoped the government would address.
Federation of Malaysian Consumers Associations (Fomca) president Datuk N. Marimuthu said the three concerns topped the wish list of consumers.
"The issue of high prices of houses, affecting millions of consumers, has been a long-standing one. Due to the high prices, many prospective buyers have been forced to look at locations that are far away from their workplaces, thus driving up their expenditures."
He said monthly housing loan installments, which could run up to 30 years, had also reduced consumers' spending power.
"People are also worried about the implementation of GST and the government should address this. One of the ways is to lower the income tax because paying income tax and GST will burn a big a hole in their pockets," he said yesterday.
Malaysian Institute of Economic Research executive director Dr Zakariah Abdul Rashid said those earning around RM4,000 to RM5,000 monthly were the most vulnerable and needed attention.
"Measures to curb the spiralling price of houses to assist the medium-income group should be included in the budget," he said, adding that one measure was to get private developers to build low-cost homes.
Zakariah said there was also a need to increase the Real Property Gains Tax (RPGT) to curb speculative buying and impose higher stamp duty on the purchase of a third property and above.
The RPGT had been set at 15 per cent for properties held and disposed within two years, and 10 per cent if disposed between two and five years.
He said the 2014 Budget needed to address weaknesses in domestic economic fundamentals, adapt to the global economic landscape and restore faith in the government.
Alliance Research chief economist Manokaran Mottain said the people could expect the government to announce a timeline for the implementation of the GST.
"The government may need a period of 12 to 18 months for the parliamentary processes before it is made into legislation."
Professor Dr Hoo Ke Ping said not implementing the GST would not be a smart move as it could delay plans to reduce the national debt.
Analysts were also expecting other measures, including further rationalisation of subsidies.
Meanwhile, Bernama reports that RAM Holdings Group chief economist Dr Yeah Kim Leng said fuel subsidies were inefficient, unproductive and a waste of government resources as they led to smuggling and other illegal activities.
He said subsidies on food such as sugar, flour and rice could also be replaced with a well-designed programmes for the low-income group.
Khazanah Nasional Bhd managing director Tan Sri Azman Mokhtar said he expected the next year's budget to be a balanced one which aimed at ensuring fiscal challenges were well-managed.
The budget, he said, needed to be fiscally responsible, while maintaining growth and ensuring the people would not be left out. Additional reporting by Roziana Hasmawi and Muhammed Ahmad Hamdan