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Monday, January 20, 2014

Rising cost not only due to fiscal consolidation measures, says DPM

Posted on 15 January 2014 - 04:54pm
Last updated on 16 January 2014 - 11:46am
Hemananthani Sivanandam

PUTRAJAYA (Jan 15, 2014): The government has formed a Cabinet committee to address the rising cost of living, with emphasis on identifying factors that determine price hikes.

It has also set up a laboratory to look into ways to help reduce the people’s financial burden besides recommending measures to help them face difficult times.

Headed by Deputy Prime Minister Tan Sri Muhyiddin Yassin, the panel will act as a central mechanism for handling the two issues.

“The government is aware of and concerned with the people’s burden and is serious in finding ways to tackle the rising cost of goods and services,” he said after the Cabinet meeting today.

Muhyiddin said the committee will engage consumer associations and business organisations such as manufacturers, suppliers, retailers and non-governmental organisations to tackle issues related to supply of goods and services.

It will also look at the supply chain, competition, enforcement and other factors that determine the cost of goods.

Muhyiddin said the Domestic Trade, Cooperatives and Consumerism Ministry and other related bodies such as the Finance Ministry and the Agriculture and Agro Based Industry Ministry will be part of the committee to look at the issue in a holistic manner.

Muhyiddin said Cabinet ministers have been advised to go to the ground to identify the grouses of the people as a result of price hikes.

“For example, I am the Education Minister but there are aspects of the issue involving my portfolio, like rent for school canteens.

“Maybe if we reduce the rent, then the operators will not feel burdened and have no justification to increase prices. This is a suggestion I will bring to my post-Cabinet meeting,” he said.

He said the rising cost of goods and services is not due to the fiscal consolidation measures undertaken by the government but stemmed from other issues such as market structure and supply of goods.

He said certain quarters feel that the hike in electricity tariffs, the implementation of the minimum wage, as well as the proposed Goods and Services Tax (GST) which will come into effect in April are among the reasons for the hike in prices of goods and services.

“Some people are just using this as an excuse but we want to explain to the people that it is not due to these factors,” he added.

He said the committee would also work with the fiscal policy committee, chaired by Prime Minister Datuk Seri Najib Abdul Razak, to look into tax policies and subsidy rationalisation.

Muhyiddin said the committee would streamline all policies and programmes relating to the cost of living and conduct sectoral studies relating to price increases.

“This will include price increases that are unrelated to (the Government’s) fiscal consolidation measures but stem from market structural issues, including supply and marketing systems,” he added.

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