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Friday, December 27, 2013

Consumerism issues capture more attention in 2013

DECEMBER 27, 2013
A seafood stall keeper returns change to a customer at a market in
Kuala Lumpur August 27, 2013. — Reuters pic
KUALA LUMPUR, Dec 27 — The year 2013 saw a number of consumerism issues, including subsidy rationalisation, Goods and Services Tax (GST), price of consumer products, utility tariffs and housing, being the hot topic of debates. 

In regards to subsidy rationalisation, the year saw an increase in the price of two commodities, namely fuel and sugar. 

In September, the price of petrol RON95 and diesel was increased by 20 sen respectively under the subsidy rationalisation programme, which could save the government from subsidy burden of RM3.3 billion a year. 

Despite the 20-sen subsidy reduction, the government still provides 63-sen subsidy for a litre of RON95 and 80 sen for a litre of diesel. 

The subsidy rationalisation programme also saw the abolition of sugar subsidy by 34 sen, which made the price of a kilogramme of sugar to stand at RM2.85 now compared to RM2.50 previously. 

Prime Minister Datuk Seri Najib Tun Razak, when announcing the abolition of sugar subsidy in the 2014 Budget last October, said that the move was made because of concerns over the rising number of diabetes cases in the country. 

While some were cynical about the statement, the move could actually help the government to save RM551.25 million from the abolished subsidy in 2014. 

Another consumerism issue that captured public attention this year was the six per cent GST, which to be implemented from April 2015, to replace the Sales and Service Tax (SST). 

Many claimed that the implementation of the GST would cause the price of certain goods and services to become more expensive. 

Finance Ministry secretary-general Tan Sri Dr Mohd Irwan Siregar Abdullah clarified that the GST was better than SST as it only imposed a six per cent tax on goods and services, compared to SST, which comprised Sales Tax of 10 per cent and Service Tax of six per cent. 

In order to protect the people, the government had decided that the GST would not be imposed on essential items. 

“GST is not really an issue because it's not a new tax. It's just a tax reform method,” Kuala Lumpur Consumer Safety Association president Samsudin Mohamad Fauzi told Bernama. 

Earlier this year, the government had also decided to review the gas and electricity subsidies, with the electricity tariff in Peninsular Malaysia being increased by 14.89 per cent or 4.99 sen per kilowatt hour (kWh) to 38.53 sen/kWh, effective Jan 1, 2014. 

The current electricity tariff in the peninsula is 33.54 sen/kWh. 

The electricity tariff in Sabah and Labuan would also be increased by 5 sen/kWh or by 16.9 per cent from the current rate of 29.52 sen/kWj, effective on the same date. 

However, 70.67 per cent or 4.56 million of the 6.45 million domestic users in the peninsula, and 62 per cent or 260,000 of the 418,000 in Sabah and Labuan, who use electricity at the rate of 300 kWh and below, will not be affected by the review. 

The last time the tariff was reviewed was in June 2011. 

In the meantime, the issue of home ownership was answered when Najib, in tabling the 2014 Budget, announced a series of measures to increase the people's affordability of buying a house, to keep house prices stable, and to curb extreme housing speculation activities. 

One of the important measure was the cooperation to be forged between the government and private sectors to build a total of 223,000 affordable housing units in a bid to improve the people's access to home ownership. 

In addition, the government would also introduce a Private Affordable Housing Scheme or MyHome, which offers a subsidy of RM30,000 per unit, to encourage private housing developers to build more low- and medium-cost houses. — Bernama

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