As an entrepreneur, I do not see inflation as something to be frowned upon. If under control, inflation can be a good thing. It is a sign that the economy is growing and consumers have a higher disposable income. This translates into a more robust economy as we collectively become better off as a nation.

But these days, the rising cost of living has become a pressing national concern as it affects our everyday lives. Two weeks ago, the government raised petrol prices by 20 sen, as part of its subsidy rationalisation policy. Following the unpopular move, the public has kicked up a fuss, as this is expected to have a domino effect on other goods and services.

Starting next April 1, the government will introduce the Goods and Services Tax (GST). The whole idea behind the GST is to enlarge our tax base and increase the government’s revenue collection. It is a system used in many countries, especially developed ones. But as experience in these countries show, one of the most immediate effects of GST is inflation.

This is not something the public looks forward to. Many of them complain that only their salaries have not risen in tandem. All these are hurting the lower and middle class who have to tighten their belts to stretch their ringgit.

Although the government is trying to mitigate this with programmes like giving out BR1M and building cheaper homes, it is not enough. For example, next year, the government will give out RM950 for each eligible household under BR1M. This translates to only about RM2.60 per day per household!

The government should study how other countries implement their subsidy programmes with a view of emulating the appropriate ones here. Right now, the rich and the poor enjoy the same subsidies, whether it’s petrol, sugar or rice. For long, there have been calls to put in place a more targeted subsidy policy, whether in the form of petrol card system or more specific cash back to the lower income groups.

On that note, the government should also look into beefing up its public procurement processes to cut leakages. Each year, we read in the Auditor-General’s Reports about how exorbitant sum of taxpayers’ money is wasted due to weak institutional oversight or outright corruption. The money could have been better used to alleviate the plight of the poor.

Malaysians would have to brace for more inflation
Malaysians would have to brace for more inflation