The Malaysian Insight

PAKATAN Harapan won the 14th general election mainly on its promise to ease living costs, but seven months later, working-class Malaysians do not feel like things are cheaper.

For its part, government data shows that the consumer price index (CPI), which measures the inflation rate, was lower from January to September last year compared with the same period in 2017 during Barisan Nasional’s rule.

Domestic Trade and Consumer Affairs Minister Saifuddin Nasution Ismail, in a parliamentary speech last August, said of a list of 417 most-used items, many saw a drop in prices after the goods and services tax was zero-rated on June 1 before being scrapped to make way for the sales and services tax in September.

However, consumers like Noriah Ahmad do not feel that prices have changed since GST was done away with.

“Things are not cheaper, especially food. I feel that life is getting tougher year by year,” said Noriah, who sells roasted corn by the roadside in Penang.

Nursuhaila Abdul Halim, who runs a sundry shop in Kuala Lumpur, expressed the same sentiment.

“There is no change to how I spend after GST (was scrapped). During GST’s implementation, fresh sardines were RM8 to RM9 per kg. Now, it’s about RM10 per kg,” said the 36-year-old mother of two.

More than half of 10 people interviewed by The Malaysian Insight in the Klang Valley, Penang and Sarawak said they are paying more for daily necessities, despite PH ending the unpopular GST, which was levied on almost all goods except 900, comprising mostly fresh food items.

Six of the families interviewed said the prices of fish, vegetables and soap are increasing, and what little they saved from the abolition of GST is now gone.

Four said their spending power has increased slightly, and they are able to save more at the end of the month.

One family from Sarawak said there is little change in their monthly shopping bill between the GST era and after the tax was ended.

However, some, like Mohamad Kamarul Hafiz and Tamilselvi Thaijarajah, said they are paying less after the tax was scrapped.

Inflation rates

The PH government scrapped GST and reintroduced SST, which is imposed on manufacturers, importers and some services, on September 1.

In a parliamentary speech on November 1, Economics Affairs Minister Mohamed Azmin Ali said CIP was only 1.2 % from January to September last year, compared with 3.9% in the corresponding period the previous year.

The Statistics Department’s latest figures showed that the prices of goods, as tracked by CPI, were higher by 0.2% last November compared with the same month in 2017.

In November last year, CPI was at 121 points, while in November 2017, it stood at 120.8 points. The rate of increase was 3.4%.

There was also a CPI increase of 0.2% in November last year from the preceding month.

The department said the increase was due to higher prices for housing, water, electricity, gas and other fuels (2%), education (1.4%), restaurants and hotels (1.2%), food and non-alcoholic beverages (1.1%), and alcoholic beverages and tobacco (1%).

In his parliamentary speech, Saifuddin said the CPI rates for January to May were 2.7%, February (1.4%), March (1.3%), April (1.4%) and May (1.8%).

‘Things are still expensive’

Kamarul, who lives in Kuala Lumpur, said he is able to save about RM200 a month since GST was abolished.

“I’ve been able to save a little since I don’t have to pay for GST, but things are still expensive,” said the 26-year-old traffic management officer, whose household earns about RM3,000 per month.

He was among four of the 10 people interviewed who said they have felt a positive difference in expenses for daily necessities since PH took over last May.

Retiree Shuhaimi Salleh and his friend, Latif Man, of Kg Hulu Gunung in Alor Star, Kedah, said the same.

“I no longer hear people in the village complaining. Before this, people used to groan about how much they had to pay for GST when they changed their car tyres, for instance. But you don’t hear that any more,” said the 60-year-old Shuhaimi.

In Subang Jaya, administration officer Tamilselvi said her shopping bill has reduced.

“My company gets charged GST when we buy imported equipment. But as a family, prices for household goods are now lower because there is no tax.”

However, Penangite Yusni Ahmad said he still faces financial difficulty despite GST being no more.

“I have five kids. A budget of RM50 a day to buy food at the market is hardly enough. If you buy 2kg of fish, about half the money is gone,” said the 50-year-old nasi lemak seller.

“For my stall, I am paying more for chicken, ikan bilis and eggs. The prices have increased this year.”

Fellow Penang resident Nina Ewe said the prices of certain goods have gone up post-GST.

“The bleach I used to buy at Tesco was less than RM3 when there was GST. Now, it costs more than RM3.

“Lux soap is more expensive, too. Before, four bars were selling at between RM2.90 and RM3.10. Now, three bars cost RM3.95. Some places sell them for more than RM4,” said the 70-year-old.

“Taking away GST and replacing it with SST has not brought down prices or reduced the cost of living.” – January 1, 2019.