The price increase has made daily budgeting and purchasing tougher, especially to meet the demand of households
by S BIRRUNTHA / pic MUHD AMIN NAHARUL
MALAYSIANS are struggling with the rising cost of living, which affects the affordability of basic necessities, including food, housing, transportation, education and healthcare.
Prices for almost all food items and general goods have increased by multi folds in the last few years globally, amid food security protectionism measures taken by producers in light of geopolitical instability and the coronavirus pandemic.
The increase in prices has made daily budgeting and purchasing tougher, especially to meet the demand of households, surveyed Malaysians told The Malaysian Reserve (TMR).
Nur Maisarah, 28, a nurse in a government hospital, shared that rising living cost have made her budget stricter, and she avoids impulsive purchases.
She said currently, there is a need for two people’s income to run one household rather than relying on a single breadwinner.
“Two years ago, I had a savings account. But that has been used up almost entirely after my husband lost his source of income due to the Covid-19 pandemic.
“Everything has become so expensive now. So, we manage our household by staying in as much as possible, meal planning, driving less and taking public transport,” the mother of one said, adding that making simple sacrifices like to have dinner out just once every two weeks, buying new clothes once a year and finding joy in simplicity.
Thamilselvi Sankar, 42, a housewife in Puchong, said she could no longer afford eggs in a carton because the price has increased. So instead, she only buys ten eggs at one time to save cost.
“Eggs are in stock and limited, so now I buy a small tray because eggs are hard to get where I live,” she said.
Thamilselvi, who has three children, also cited the increase in the price of seafood.
“The seafood price has also increased consistently. For example, the cost of ikan kembung (Indian mackerel) is now between RM18 and RM22 per kg, while ikan selar (horse mackerel) went up to RM20 per kg compared to RM16 last year,” she said, adding that prices of prawns and squid also increased compared to last year.
Thamilselvi expressed hope that the government led by Datuk Seri Anwar Ibrahim would succeed in making reforms, especially in helping the people, by controlling the prices of essential goods.
Sales marketing executive Muhammad Hani Najwan, 30, said his three-member family has been living hand to mouth, although the monthly household income of RM4,800 places him as middle-income.
Due to the increasing cost of living, Muhammad Hani said he had to allow his wife to work soon after maternity leave and was worried about leaving his young child in the daycare centre.
“Before the Covid-19 pandemic, I usually only spent about RM400 a month on kitchen items, including baby milk, but now it has increased to RM600 for the same things…not to mention other expenses such as babysitting, housing and vehicle loan payments.
“Now I must also consider spending for Raya’s preparations, which are just two months away. It is not going to be easy,” he said.
Muhammad Hani also hoped that Anwar’s administration would eventually find an efficient solution to address the people’s cost of living dilemma.
He said the government should look into the living wage and ensure that it reflects the current standard of living.
Economists On the Rising Living Cost
Centre for Market Education (CME) CEO Dr Carmelo Ferlito said inflation has gone up in general, and the actual effect is partially offset by price control measures and subsidies — although food prices remain a primary concern.
Ferlito said the previous administrations blew inflation by expanding the money supply with expansive fiscal policies, supported by low-interest rates for a stretched timeframe.
According to him, Malaysians are now paying for past mistakes, and CME had cautioned on the misstep since early 2021.
“Now, the rise of interest rates is positive, but not enough, and it should be supported by a more holistic plan to rationalise government spending,” he said.
“The fiscal responsibility act is a good starting point, but we need more courage in reintroducing the primacy of a balanced budget,” he added.
Meanwhile, CME fellow Professor John Hearn said the most straightforward rule is to re-establish the importance and superiority of balanced budgets, which will finally destroy the unhealthy belief in the existence of free lunches.
He said such a rule should incorporate an automatic adjustment mechanism for budget outlays projected to exceed tax receipts.
“For example, if the projected balanced budget proves in error and a budget deficit beyond specified limits occurs, the federal outlays shall be automatically adjusted downward to restore projected balance within three months.
“Eventual surpluses, instead, should be used to retire existing debt,” he noted.
Putra Business School Assoc Prof Dr Ahmed Razman Abdul Latiff said although the inflation rate was 3.7% in January 2023, it has increased by 29.5% since 2010.
Among the price hikes that middle- and lower-income Malaysians struggle to cope with include food, transportation, education, housing loans and other loans.
As such, Ahmed Razman said the government should address the issue of rising living costs by empowering domestic production, thus transitioning into a producing nation rather than a consumer.
“For the short term, the government is addressing through subsidies, and for the middle term, the government should reduce dependency on imports,” he noted.
An economist attached to a local research house said the increase in the price of goods and the cost of living would continue to be a challenge in 2023, and it would be difficult to predict the correction in prices of goods due to the global economic recession.
“I believe the government should separate each value supply chain for each item because each has different trading methods and various industry players.
“But in the long term, government agencies need to work with government-linked companies and micro, small and medium enterprises to develop the agricultural sector,” the expert said, adding that Malaysia should emulate Thailand, which is thriving at 38% of its GDP contributed by the agricultural industry.
Govt Promises to Prioritise Cost of Living
The Unity Government led by Anwar has pledged to help the people reduce the cost of living while setting an ambitious target of ending hardcore poverty by next year.
This year, the government announced funds up to RM64 billion in various subsidies, aid and incentives to reduce living costs through price controls, financial assistance and providing services to the people.
According to Anwar, the ministry responsible should ensure the funds are disbursed effectively to avoid any leakages.
“The Payung Rahmah concept has been introduced as a parent to help the poor and vulnerable. One of them is the Menu Rahmah initiative which organises the sale of set meals at only RM5. This initiative is expected to continue to receive a good response from food businesses and the people.
“I would like to thank the traders, hawkers, stall workers and small restaurants who recorded a small profit but are willing to help the people in need,” Anwar, also the finance minister, said while presenting the revised Budget 2023 last month.
- This article first appeared in The Malaysian Reserve weekly print edition