Subscribe in a reader | Subscribe by Email Today at 5pm, the Prime Minister made statements (read it at PMO’s website together with the distribution of the income) that sent shockwaves throughout the country. Many were expecting increase in oil prices, but not up to 40%. Even Taiwan increased by 16% recently, while Indonesia by 30%. India also increased oil prices today in the capital areas (refer Malaysiakini). I can accept an increase of 78 sen which is very very steep, but it could have been done gradually step-wise in 3 months instead of in one single sweep.
Diesel saw an increase of RM1 (63%) to RM2.58. But it does not affect the public transportation services.
The PM also announced new tariff for TNB which takes effect from 1st July. This means those who spend less than RM43.60 (200 kW) currently would not be affected. Those who spend more than that amount will see an increase of 18%. The new tariff is as follows:
1-200 kW = RM21.80
201-400 = Rm34.50 (increase of 19.4% from RM28.90)
for first 500 units above 400 kw is 30 sen/unit. Anything above 900 units is 46 sen per unit. Complete table is here.
He acknowledges that this is not a popular decision, but a necessary one.
“We try our best. This isn’t an attempt to be popular. (But) we have to think in the best interest of the people,” he told reporters during a 50-minute press conference held at his office in Putrajaya this afternoon.
“We can’t satisfy everyone. Anything that involves people paying more, naturally they are going to be unhappy. (I hope) they will understand the circumstances we are working under,” he added.
source
Let’s look at the benefits (for general public) being offered:
1. Those with car having 2000cc (and bikes below 250cc) and below will get RM625 (Rm150 for bikes) annual rebate when they renew road tax beginning 1st July. Those qualified are road tax from 1st April 2008. However, it is clear that the rebate will not even cover half a year’s increase in petrol price. Money will be given in form of Postal Order when road tax is renewed, so make sure your addresses are updated at JPJ.
2. For those with bigger capacity cars, they will “enjoy” RM200 reduction in road tax. Similar for bikes with more than 250cc.
3. Cooking oil prices remain.
4. Service tax criteria for restaurants increased from RM500,000 to RM3 million. Thus many restaurants are expected NOT to charge service tax. Please check before you pay.
Total savings from reducing subsidies and levy on industries (IPP and palm oil producers) is about RM13.7 billion. Where does the saved income go to? Here’s the breakdown:
National Food Stockpile – 4.0 b
Cooking oil subsidy – 1.5 b
Purchase of imported rice – 0.4 b
Flour subsidy – 0.2 b
Bread subsidy – 0.1 b
Petrol, Diesel and Gas subsidy – 7.5 b
Total – 13.7 b
Thus we can see that majority of the saving will be used to subsidise fuel (government is still offering fuel below market price which is more than RM3.50). The rest is for subsidy of food related items – cooking oil, rice, bread, and flour. Problem is, there’s no mention of alternative transportation!
I think there should have been some sort of immediate incentive for public transport providers and users, toll operators etc so that public can feel some positive impact. Instead, there’s just promise of rebate when you renew road tax. Very bad move.
As for the damage of this exercise, there’s plenty as I can think of below:
1. Increase in goods price. As my renovation contractor told me, cement bag increased by RM3 with immediate effect.
2. Increase in transportation costs – school buses, taxis, tour agencies, lorries, vans, etc.
3. Increase in food price. Well, these guys just waiting for a reason to increase prices. Basically everything from pau to goreng pisang will increase. Vegetables, poultry, you name it.
4. More anger as common public suffers while the rich and the powerful still enjoy life.
5. Increase in crime rate due to desparation
I guess new tagline for pub-goers is “I drink beer, my car drinks petrol!” 🙂
Whatever it is, time to live thriftily and hope our leaders do the same as well. Good night Malaysia. Hope that you can tighten your purse and stomach when you wake up.
