Amid the raging debate over the government's proposal to remove subsidies, Time has stood still for the poor
Head of the International Movement for a Just World (Just) Chandra Muzaffar cited three reasons for this, with the massive inflow of foreign labour topping the list.
“Foreign nationals do not demand the perks that locals do, it depresses the wage at the other end of the scale causing disparity.
“Plus, globalisation has caused wages for at the top end to increase dramatically especially for those working in the information technology and banking sectors,” he told FMT.
Chandra also noted that government policies favour those at the upper level as well.
The private sector, he added, compounded the problem with its top executives raking in big bucks while those at the lower rung are not even covered by a minimum wage policy.
In view of this, Chandra said the government should revamp the subsidy scheme instead of scrapping it.
“The government should channel the necessary subsidies straight to the target group. I believe it will not make much difference to the rich if petrol price is increased.
“Right now, taxpayers are even subsidising the top end group such as the independent power producers and highway operators.” he added.
According to recent data published by the Government’s Performance Management and Delivery Unit (Pemandu), the poor (including farmers and fishermen), only receive a meagre 2.6% or RM1.9 billion of the total subsidies distributed by the government per year.
Salary scale vs soaring prices
Meanwhile, Federation of Malaysian Consumers Association (Fomca) secretary-general Muhammad Shaani Abdullah said the pay scale has not improved over the years to accommodate the soaring prices.
“In the 1980's, the basic pay for a fresh graduate was about RM1,000 on average but you can get a house for about RM40, 000 back then.
“Now, houses cost ten times more but the basic pay for freshies has only increased to between RM1800 and RM2,000.” he said.
Muhammad Shaani said low income earners have to fork out between 30% to 40% of their income just for household expenses.
“This means other basic needs such as proper savings and investing in education get sidelined,” he added.
'Govt must wake up'
On a more vocal note, Consumer Association of Subang and Shah Alam (Cassa) president Jacob George said the government must wake up to the reality that income disparity is a serious issue.
“Even if a person earns RM5,000 a month, and if he needs to feed five people, then he will come under the low income category. More than half of Malaysians earn less than RM3,000,” he added.
According to the World Bank, the highest 10% of income earners in Malaysia hold 37.9% of the country’s wealth while the bottom 10% only hold a meagre 1.8%.
To supplement that figure, the Department of Statistics Malaysia reported that more than half of Malaysian households earn a monthly income of less than RM3,000.
Asked why disparity is soaring despite strong government measures, George blamed the ineffectiveness of the delivery system.
“The benefits are being hijacked by commercial fat cats. The end result is more Malaysians are now living on credit, myself included,” he said.
As for the removal of subsidies, George warned that it will court chaos.
“Low income earners will not be able to absorb the surge in household prices,” he said, urging the government to have the political will to address this issue in a “lean and mean” manner.
Weed out graft
Chandra (photo), Muhammad Shaani and George were also on the same page regarding the importance of weeding out corruption to the set the house in order.
“Though I do not have the exact numbers, I believe wastages and leakages can cause problems to the nation's financial management,” said Chandra.
“When a construction cost that is originally priced at RM10 million escalates to RM15 million, it does damage to our finances for sure,” he added.
George surmised that bureaucracy and a bloated civil service are the breeding grounds for corruption.
“When you have too much red tape, it causes a lot of constraints to investors as it costs them time and money. So to avoid that, they have no choice but to offer “something” to speed things up.
“Some even take their investments to other places as they are opposed to graft, causing Malaysians to lose job opportunities. I have seen it with my own eyes,” he said.
Free Malaysia Today
17/06/10
Head of the International Movement for a Just World (Just) Chandra Muzaffar cited three reasons for this, with the massive inflow of foreign labour topping the list.
“Foreign nationals do not demand the perks that locals do, it depresses the wage at the other end of the scale causing disparity.
“Plus, globalisation has caused wages for at the top end to increase dramatically especially for those working in the information technology and banking sectors,” he told FMT.
Chandra also noted that government policies favour those at the upper level as well.
The private sector, he added, compounded the problem with its top executives raking in big bucks while those at the lower rung are not even covered by a minimum wage policy.
In view of this, Chandra said the government should revamp the subsidy scheme instead of scrapping it.
“The government should channel the necessary subsidies straight to the target group. I believe it will not make much difference to the rich if petrol price is increased.
“Right now, taxpayers are even subsidising the top end group such as the independent power producers and highway operators.” he added.
According to recent data published by the Government’s Performance Management and Delivery Unit (Pemandu), the poor (including farmers and fishermen), only receive a meagre 2.6% or RM1.9 billion of the total subsidies distributed by the government per year.
Salary scale vs soaring prices
Meanwhile, Federation of Malaysian Consumers Association (Fomca) secretary-general Muhammad Shaani Abdullah said the pay scale has not improved over the years to accommodate the soaring prices.
“In the 1980's, the basic pay for a fresh graduate was about RM1,000 on average but you can get a house for about RM40, 000 back then.
“Now, houses cost ten times more but the basic pay for freshies has only increased to between RM1800 and RM2,000.” he said.
Muhammad Shaani said low income earners have to fork out between 30% to 40% of their income just for household expenses.
“This means other basic needs such as proper savings and investing in education get sidelined,” he added.
'Govt must wake up'
On a more vocal note, Consumer Association of Subang and Shah Alam (Cassa) president Jacob George said the government must wake up to the reality that income disparity is a serious issue.
“Even if a person earns RM5,000 a month, and if he needs to feed five people, then he will come under the low income category. More than half of Malaysians earn less than RM3,000,” he added.
According to the World Bank, the highest 10% of income earners in Malaysia hold 37.9% of the country’s wealth while the bottom 10% only hold a meagre 1.8%.
To supplement that figure, the Department of Statistics Malaysia reported that more than half of Malaysian households earn a monthly income of less than RM3,000.
Asked why disparity is soaring despite strong government measures, George blamed the ineffectiveness of the delivery system.
“The benefits are being hijacked by commercial fat cats. The end result is more Malaysians are now living on credit, myself included,” he said.
As for the removal of subsidies, George warned that it will court chaos.
“Low income earners will not be able to absorb the surge in household prices,” he said, urging the government to have the political will to address this issue in a “lean and mean” manner.
Weed out graft
Chandra (photo), Muhammad Shaani and George were also on the same page regarding the importance of weeding out corruption to the set the house in order.
“Though I do not have the exact numbers, I believe wastages and leakages can cause problems to the nation's financial management,” said Chandra.
“When a construction cost that is originally priced at RM10 million escalates to RM15 million, it does damage to our finances for sure,” he added.
George surmised that bureaucracy and a bloated civil service are the breeding grounds for corruption.
“When you have too much red tape, it causes a lot of constraints to investors as it costs them time and money. So to avoid that, they have no choice but to offer “something” to speed things up.
“Some even take their investments to other places as they are opposed to graft, causing Malaysians to lose job opportunities. I have seen it with my own eyes,” he said.
Free Malaysia Today
17/06/10
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