GST and consumer power

Updated.

Almost one month has passed since the implementation of GST, has the cost of living gone up?

GST was successfully implemented in many countries and is perceived to be a useful tax to raise revenue for the government.  Protagonists will label it as a fair tax; you pay when you spend; the more you consume, the more you pay.  But if you are one of those living and working in the cities in Malaysia and earning a salary slightly higher than the minimal wage, you probably will be the one worst hit by this so called consumption tax and you will not welcome this.

Even though essential items are exempted from this tax, working persons will have no choice but to eat at least one meal outside. And if you eat a meal outside, you will definitely feel the effects of this tax on your pocket.

So far, I have come across three categories of businesses on how they deal with GST.

1. Many merchants have put out notices that they absorb GST. One prominent example is multinational company IKEA. There are notices in Ikea stating that prices remain as before. They must have a very comfortable profit margin to be able to absorb six percent of taxation. Anyway, as consumers, most of us would be happy to patronize these.

2. Many are charging more than six percent even though  on their receipt, it is programmed to read 6 percent. One example is those curry puff chain stores.  One of them  was selling curry puff for RM 2 per piece just before CNY.  After CNY, it was raised to RM 2.20, reasons being that the impending implementation of GST has raised cost and thus a 10 percent adjustment in price.  But then, come April first, the curry puff price went up to 2.40 , an increase of another 20 cents. Six percent GST on 2.20 would be 13 cents, so why increase it by another 20 cents? Why can’t they just sell it at 2.35 or even 2.30 , since they have already increase their puff by ten percent just a couple of months earlier? On the receipt, of course, GST reads exactly six percent of a puff which are now priced higher at 2.26.

A fried YaoCharKway (fried chinese doughnut or flour sticks) in uptown used to charge 40 sen per stick (the small variety type, not the normal long one available elsewhere). Now he is charging 50 sen per stick, an hefty increase of 25%. The reason is that as a small business, he can’t charge GST but have to buy raw materials which may be subjected to GST. So he has to pass on the increase. An increase of 25% no less, even though GST is only 6%.  It doesn’t matter that not all his raw materials are subjected to GST; flour and sugar are certainly GST exempted.

One of my favorite cafe at uptown Damansara raised its white coffee from RM 3 to RM 3.30 a cup, an increase of 10  percent, starting this month.  On top of that, GST is charged on the 3.30. Which means an increase of more than 16 %  on that cup of coffee. The reason given is again increase of cost of living due to the new tax. By their logic, the six percent GST  is causing the cost of living to go up 10 percent? These merchants must be either out of their minds or they are such good predictors of future that they could predict that there is a rise of cost of living of 10% due to the six percent of GST.  More likely, they are shrewd businessmen trying to make more profits using GST as a pretext.

3. This category did not use GST as an excuse to raise their prices, yet! They charge GST as GST should be charged– prices of goods purchased plus 6 %.  They did not have to absorb any cost, but they also did not go all out to profit from the pretext of an increase in cost of living due to GST implementation. Examples are plenty: many restaurants, most hypermarkets and supermarkets.

There are many other examples of category 2 merchants. Precisely because of these unscrupulous merchants , cost of living may go up higher than what it should be purely on GST taxation per se. Precisely because of there are so many category 2 businesses,  that we should have perhaps postponed the implementation of GST until people’s mentality changes to that of first world countries, or until such time when enforcement improves and profiteering can be cut down to a minimum.

In the meantime, what can we consumers do? individual Consumers are powerless, but together we can teach these cat2 merchants a lesson. If they raise their prices in addition to charging GST, like the examples I quoted above,  we should  all stop patronizing them. If we can do that, we will be sending a strong signal to these people that profiteering will not be tolerated.

Afterall, what are they without the consumers?

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P.S. There are of course the  rare ones that have lowered their prices. These outlets are so rare that I won’t even categorise them. One of them is this :

image

 

Please note that although this outlet has reduced its prices, they are still not cheap and would still be out of reach for the ordinary wage earners. Anyway, this act of reducing price is commendable and hopefully more outlets should take after this.

Stand up and take charge

I applaud the 25 prominent Malay dignitaries who came forward to preach moderation for Malaysia.

Today, I read that another 33 Malaysians from different ethnic groups have come forward to voice their concern about the extremist views that have been uttered by various rightist groups.

The country as I see it is facing certain hurdles in its journey towards a developed nation.

The most obvious and dangerous one is of course extremist views have gone largely unchecked, and the perception is UMNO has turned more and more to the right and this does not herald well for the party and the country.

Another hurdle is the slowing economy and rising inflation, but this will not be discussed here at the moment.

So the brave 25 prominent Malays who started the ball rolling must be given credit for voicing out the views of many. Even though they have the comfort in numbers, this is still an act of courage to stand up and urge the country to go back to its roots and Federal Constitution.

The ball is now in the court of the Prime Minister. He has often preached moderation, especially in overseas forum. The position of PM is a very powerful one. He should start exerting himself if he really believe in what he preaches. Please read this old post of mine “Please walk the talk’.

Without PM exerting leadership and taking control and clamping down on the extremist views, whatever is uttered by these prominent Malaysians will not have much effect.

It is up to the PM to act decisively. His about turn in Sedition Act shows the amount of pressure he is under, especially when many of the UMNO’s delegates have turned rightist.  The latter is the results of leadership not showing a firm direction for party members. When there is a vacuum, little wonders that   many big wits including the Old Horse start to lead the way. The result:  the party is now what it is now

His office is powerful. He can overcome the obstacles if he starts exerting his power now. Leader must not be follower of trends. A good leader must be able to buck the trend and turn opinion around.

I am hoping  that PM will start doing that, and walk his talk. The country needs that. As i see it, he is the only one AT THE MOMENT with the stature and power  to stand up and clamp down on the extremists, and only with him doing that, the country can go back to its moderate way again.

 

A step backward

Many of us are disappointed with the about turn in retaining the Sedition Act. Many have written about  this flip flop in the various online media, and many conclusions are made. I have written many times in the past about the need to abolish this Act, and I am not going to write on that again since so many voices have already done so  following the flip-flop.

I shall just attempt to put forward my two cents worth of opinion  about the politics that may have to do with this about turn.

We can draw a few inference from this about turn:

1. PM, the alleged reformer,  has decided put his own position above the reforms that he would like to implement.

2. The reason why he needs to do so  is that he is not as strong as we thought.  All along we  know that he is not in full control of the party, with even the Old Horse openly declared that he was withdrawing his support. The Old HOrse is a wily old man, and he must have evaluated carefully about the strength of PM and his own support before doing so. The Old Horse has not done a “Pah Lah” to PM yet. This is more to do with the fact that there is no viable candidate to succeed PM at the moment. But the scenario could change in a few years’s time when his son builds up support and is ready to take over the helm.

3. A few years ago, when Perkasa first came to light, I have written an article in Malaysiakini titled : ” the ascendency of right wing politics”. I will paraphrase  a paragraph from this article here:

” Recent events have showed that right-wing politics is on the rise and the ascendancy of these right-wingers do not bode well for the country. The country is on the road to extreme racist politics if these right-wingers have their way. The road that these right-wingers advocate is a direct opposite of the ‘1Malaysia’ concept which was introduced by none other than the prime minister himself.”

That was written in 2010 and events have proven me correct. These right wing NGOs have succeeded to implants false ‘seeds’ in the minds of many rural people, and as the saying goes, if a lie is told a hundred times, people will tend to believe. These right wing organisations have succeeded in playing up the fears and insecurity of many people, and thus have influenced many of the delegates of UMNO. UMNO is now much more right wing than before, because many of the warlords thought by adopting a more right wing approach, they can probably change the tide and gain more grounds, and thus ensure their own survival.

Seeing the tide is building against the abolition of the Act within the party, it is either doing the about turn or risk losing support in the assembly.  PM chose the former course. In doing so he is taking a step back. Will this step back results in 2 steps forward later, 0nly time will tell.

4. the failure to inform other component parties before the about-turn says much about the complete marginalisation of these parties.  The quickness of all component parties in coming to terms with this about-turn, even though many in the past favoured abolition of the Act, show the pitiful state of these parties now. One wonders why they are still in the Front; they are no longer able to influence any big decisions.

A wake up call for Pakatan

In early May, I was invited to give a talk to the Nanyang University Alumni Association in Section 13, Petaling Jaya.

During the Q and A session, the chairman of the session as well as the president of the association asked for my  view on the 2 oncoming by elections , the one in Bukit Gelugor and Teluk Intan.

I ventured to say that it would be an easy walk for DAP in Bukit Gelugor, and I saw the audience all nodding their heads in agreement.

But when I opined that in Teluk Intan, Parti Gerakan stands a good chance of winning if Dato Mah is the candidate, I saw many skeptical looks among the audience.

Some in the audience spoke out against my opinion, saying that DAP had won the seat by a handsome margin just one year ago, and that the Chinese votes would still very much be with DAP.

I explained that in my analysis, DAP’s s Chinese support at 85% last year was already the maximum any party can hope to achieve. When you have reached the maximum, logic would have it that the support level can only either be maintained or be lower.In a by election, since it does not involve tilting  the balance of power, it would be likely to be the latter.

I told the audience that this is especially so because in those PR administered states, there is nothing really spectacular, nothing  to shout about so to speak.

In Selangor, the power struggle in PKR reminds people of UMNO politics and the KIdEX Highway put many intellectuals off. Though Teluk Intan is far away, many of its voters actually reside in Klang Valley and  these people would be showing disinterest( as well as influencing folks at home)  to go back to vote once they perceive that PR is not really that much of a  better alternative.  By approving  the Kidex HIghway, the MB was deemed to be arrogant and went against the manifesto of his own party.

So i expected the Chinese support to decrease, and to counter this, DAP would have to bang on an increase in Malay support that must be sizeable enough to counter the loss of  Chinese support. In this, I don’t see how they can do so. (AT that time , DAP has not announced the candidacy of a young Malays woman; later when the party made its choice,  I thought it was a brilliant strategy by the part of the Senior Lim of DAP, to counter the expected loss of Chinese votes but it was still not enough).

The hudud issue also put many people off. In this, DAP truly misses the presence of the late Karpal SIngh. With Karpal SIngh died an untimely death, many are of the opinion that DAP does not have another one with the stature to stand up to PAS in the hudud issue. The hudud issue glaringly shows that it was a case of “sleeping in the same bed but having different dreams”, as the Chinese proverb goes, and it has helped to reduce Chinese support for DAP, but at the same time did not do much to win Malay support for Pakatan.

Then I mentioned too that Mah, the likely candidate for BN, would be an asset. He is well known in the constituency, being a very hard working MP for 2 terms, and by virtual of being the president of Gerakan, a win for him would certainly mean a cabinet position of some sort, which would help bring development to Teluk Intan.

So all in all, at that session of talk, I thought Mah would have a very good chance to win.

I was proven right.

SO what does it mean in the politics of Malaysia? FIrstly, the win would be a morale booster for Parti Gerakan; a loss would have put another nail in the coffin, but a win would be like an adrenaline jab in an ailing heart, it would strengthen the party to a certain extent.

In the bigger context, PR would have to review its strategy and perhaps relook at the policies in states under its administration. Even in Penang, there are starting to have some voices expressing disilusionment with the administration. The coalition has gone through 2 GEs, but yet it still cannot function as a cohesive unit.  PR campaigned on the promise of Change, but how much change are we seeing ?  Many of the  things that PR used to criticise BN, like  changing new state luxury cars and overseas travel, some of its leaders are doing as well…

Teluk Intan should be taken as a wake up call to DAP in particular and PR in general. No party is invincible in politics. If it cannot deliver what it has promised, then after one or two terms, people will get disillusioned and vote the other way.

That is the essence of the pendulum theory.

One year after

One year and three days after the last General election, the fledging two party system has not really resulted any radical changes to make life easier or better for ordinary folks like you and me.

Instead, the country is now more divided and more polarised than before.

The latest by an extremist group that Chinese Malaysians are penceroboh is just one of the unending extremist statements made over the past one year. Maybe this person is emboldened by the lack of official action towards Perkasa, the president of which has time and again uttered extremist views and got away with it.

This time, if nothing is done, it will set a dangerous trend and more extremists would surface and utter dangerous views.

All these NGOs i suspect are outsourced organisation from the Big Brother and their existence and the public utterance of such views are part and parcel of an effort to consolidate rural support by the BIg Brother.  I say rural because I still believe that the Tsunami of 505 is not a Chinese Tsunami but rather an urban tsunami ( see my post Mathematically not a CHinese tsunami).

After the last election, I think Big Brother has given up on gaining back urban support. Their strategists have also realised that even without urban support, they can bank on rural  votes to carry them through.

This is further strengthened by the fact that the existence of Perkasa after 308, has really helped to frighten rural people into voting for Big Brother during 505.

Whether we like it or not, the presence of this organisation, which can say many things that the Big Brother cannot officially say  ( that is what the outsourcing is about), has really helped to consolidated rural support for Big Brother.

However, playing up racial sentiments by uttering such extremist views are dangerous. We must realise that a small spark can lead to fire. The future of the country is too precious for this to happen.

………………

There is not much to shout either in those states that are administered by the Opposition.

Just take an example. There is this project called KIDEX (Kinrara Damansara Expressway) highway which is supposed to connect Damansara and Kinrara. It is a federal project and the highway is going to be a tolled highway.

I have always thought that PR is opposed to tolled highway since it was in their manifesto. So I was so surprised that the Selangor government has  given its approval for the acquisition of lands affected.

However good the project maybe, it is actually a matter of principle that since in the manifesto, PR is against tolled highway, it should not have agreed to Kidex.

It will give an impression that all politicians are the same, no matter which side they are. If this clause of manifesto can be selectively ignored, then we can expect other parts of their manifesto, such as equality and so on, to be promises that can be broken as well.

 

 

 

 

Hopelessness and Helplessness

Many people are unhappy.

These people don’t care much about politics. They don’t care much about religious issues. They don’t care about the ‘agreement’ between Liow And Chua in the election of MCA (if posts can be agreed upon, why the need for election?). They don’t care about why no action is taken on the case of a deputy minister being hit by a third tier leader of the Big Brother. They have gone immune to these happenings in the Bolehland.

They are unhappy because they feel helpless and hopeless.

After the last General Election, I can feel a prevailing sense of helplessness and hopelessness especially among  those who live in the urban areas.

While they go about their daily activities, most things have become more and more expensive. It is no longer a case of tightening belts. It is now about survival.. This is especially true for those with young children.Many of the young parents with young children are finding it hard to make ends meet. A tin of infant formulae now is more than RM100. And that is considered essential item for a growing infant. A family income of 4000 is no longer enough to live in the cities.

This is no longer about not being able to afford a house. There is now despair that soon, many of them who are renting houses will not be able to afford to have a roof over their heads; they may not have enough to pay for the rentals.  Many of them who work and who used to eating lunch outside is now eating bread and water for their lunch.

They are feeling helpless because they see no light at the end of the tunnel. Even when most of them voted for change, there is no change for the better; there are changes but all these changes make things more and more expensive and there is now less and less money in the pockets.

They are feeling hopeless because apparently these changes are just the beginning. When GSt is implemented next year, things will become worse.

They see ministers and top civil servants travel and move in luxury while they have to cut back on everything.  But they cannot hope for any changes in the short terms since another GE will be 4 years away.

They look at opposition run states and there is not much to shout about too. So even if next election comes and they vote for change, will change be around? They have lost hope. A opposition CM has just bought a new Merz. What difference is he from other politicians? In another state, internal politics are so intense and there might be a change in MB..

Is there any solution to this? Sorry, I don’t not actually see any. Not with the current batch of ‘managers’. There is no more leadership around. The so-called leaders up there  have really lost touch with the common people and the needs of the rakyat.

My advice is only this: Live from day to day!

UP

up(Inflation is like inflated balloons. What will happened if the balloons burst…)

Came back recently from a trip to US, where I spent quite a long holiday there, visiting afew cities during my stay.

After coming back, I went to my favourite coffee shop in Paramount Garden for breakfast last Sunday. Wow, a plate of fried kway Teow has gone up 10% from RM 5 to RM5.50.

Went to one of my favourite cafe and a plate of nasi lemak has gone up a few dollars. Nasi Bojadi is now over 20 ringgits. WithRM 50, you can now buy so little even in  a hypermarket!!

what has happened?

Reading the newspapers, it seems like traders and hawkers are to be faulted since there are so many photos of enforcement officers visiting markets and checking on prices. Is it really due to profiteering by all these small traders?

Prices have generally gone up. I do not have any business but by running a clinic, I too know how much medicine costs have gone up. Paracetamol , the cheapest of all drugs, is now more than 3 times more costly than just 5 years ago. Running nose medication , especially those with vaso-constrictor drug pseudoephedrine, has gone up 8 times. The latter is because of an artificial shortage caused by the Ministry restricting the import. The reason given is there are people using pseudoephedrine to make other more sinister drugs that are commonly used by patrons of night clubs and so on.

Tranquilizers have gone up more than 10 times, and are unavailable most of the time. Again because of certain restriction by government authority to reduce its import. But there are many patients with psychosomatic symptoms that require such medication to tie than over. So these genuine patients have to folk out ten times more than the usual price to get their medication.

The last few years also see a general hike in all the drugs, be it generic or originals, but not to the extent of the drugs mentioned above. Instead of causing an artificial shortages, the government should target those who manufacture sinister drugs and those who misuse it in the night clubs and so on, instead of making the genuine patients pay for the huge increase.

Then, outside the medical fields, almost everything has gone up in prices. This is not so much due to profiteering , but due to increase in overhead.

After the 505 GE, price of petrol has gone up. This translate to an increase in transportation cost.

Electricity tariff has gone up.

Property prices and thus renta rate has gone up. Assessment in KL has gone up and this translate again to an increase in rental. Those with foreign workers have to pay RM110 more because of the i-kad. The weakening Ringgit has also caused imported goods to be more expensive.

All these resulted in an increase cost n doing business. Not so much profiteering.

So instead of asking enforcement to go down to markets to check prices, government  leaders should ask themselves, what have they done ?

Malaysia is a rich country. Why are we having deficits years after years? Why do we need such a big civil service workforce? Why do we need so many ministers? why the need to have lavish  functions whenever a minister needs to hold a meeting or so on?

Why are there so rampant corruptions and wastage? Just look at the Auditor-General’s annual reports.

If all these can be tackled, do we need to spend so much on subsidies?

All the photos of officers checking on prices are more for political reasons and rural consumption. BUt if the leaders really care, they should postpone GST, cut down on wastage, and lower electricity and toll charges.

Reducing subsidies do not really need to raise tariff or taxes. It can be done by more prudent spending and more belt tightening by the government.

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