By K Veeriah
When subsidies are withdrawn, the increase in the prices of essential items will have to been borne by the people.
Price hikes for cooking oil, sugar, electricity tariffs, eggs, chicken and vegetables have imposed tremendous economic pressures on ordinary people, especially wage earners from the bottom 40% and middle 40% of households.
The cascading effects of such price hikes have translated to higher household expenditure and an erosion of real wages earned.
Inflation, which had been contained through selective subsidies, continues to spike and may well lead to a demand for wage increases to mitigate the higher cost of living.
The recently enhanced minimum wage will become obsolete, given the rise in the cost of living following the withdrawal of subsidies and the inflationary spiral.
What will happen if the net is cast wider to remove or reduce subsidies in other areas, including fuel?
We should also be concerned if the government decides to re-introduce the goods and services tax (GST), which would push up prices of a broad base of goods and services.
The removal of targeted subsidies will reduce the disposal income of wage earners. Those in the marginalised informal sector will be the worst hit as they have neither a fixed source of income nor an adequate state-funded social security safety scheme.
The prime minister’s announcement of a RM100 increase in BKM (Malaysian Family Aid) for the bottom 40% of households is pathetic!
If the government is truly concerned about the plight of the working class, it ought to trim the bloated cabinet, including doing away with the costs of maintaining unproductive “special envoys”. By doing so, a huge chunk of wasted funds could be channelled to the people.
The prime minister and his ministers should empathise with the plight of the people by taking a cut in their salaries, perks and privileges. The government could then distribute the resulting savings to the people through enhanced BKM payments.
A parallel reduction of the incomprehensible schedule of payments, perks and financial rewards dished out to the top echelon of government-linked companies would be appropriate. This would also raise much-needed funds that could be allocated to the most vulnerable people of this nation.
K Veeriah is a veteran trade unionist based in Bukit Mertajam, Penang