Prices go up, purchasing power go down, whose fault?

 |Dec 23, 2016

Cost of Living

Last night I had dinner with a friend and he related a mutual friend saying that the chap refuses to pay any tax because the money will just be used up by Prime Minister Najib Razak.

My friend laughed as he told me this but actually it is no laughing matter because many feel that paying tax to the government is a waste of money.

The question is: if Pakatan Harapan takes over would they now pay tax or will they continue avoiding tax like they have been doing so for many years?

Actually tax evasion is quite natural and has nothing to do with who the prime minister is.

Most if not all of us do it.

How many of us walk through the green lane when we actually have some shopping stuff that we should pay tax on?

Businessmen declare a lot of expenses as travelling, entertainment, marketing and promotion, etc., even if it is to take their family and/or friends out.

Show me one person who is 100% honest on his/her tax returns and I will show you an idiot.

We resent paying tax because we do not see the need to pay tax.

Why must we pay tax when others avoid it?

Those who earn fixed salaries pay more tax compared to businessmen and tycoons who are paying pittance percentage-wise.

If you talk to the Pakatuns, you will see that they want toll-free highways, free education up to university level, free healthcare, low or no road tax, low or no import duties, and much more. In short, they want to pay nothing, or the least possible, and get all the facilities that others should pay for.

But then who are these ‘others’ who will be doing the paying if every single person was also getting things free?

Yes, we want the next door chap to pay while we pay nothing while the next door chap also wants to pay nothing and so on.

There is no such thing as a free lunch and somewhere down the line someone has to pay.

But that someone must not be me.

We blame Najib, Umno, Barisan Nasional and the government for the high cost of living or the increased cost of living.

About 30 years ago the cost to do your Haj was about RM4,000 and today it is RM9,980.

The two-to-a-room Haj package used to be RM9,500 per person and now it is RM32,900.

The Saudi Arabian visa charges alone now comes to more than RM2,000 per head.

What has that got to do with Najib, Umno, Barisan Nasional or the Malaysian government?

Prices of Goods

About 30 years ago a Mercedes 200 costs less than RM40,000.

Today it costs about RM250,000.

A BMW 7 series that used to cost RM85,000 now costs RM700,000 while a Mitsubishi that used to cost RM9,500 now costs RM115,000.

All that has nothing to with Najib, Umno, Barisan Nasional or the Malaysian government.

In May this year the government announced the minimum wage.

“The government has reviewed all recommendations submitted by the National Wages Consultative Council (NWCC), and has taken a balanced approach and considered the interests of both employers and employees (before issuing the order),” said Human Resources Minister Richard Riot.

He explained that in MWO 2016, the minimum wages set were according to region, namely RM1,000 per month or RM4.81 per hour for Peninsular Malaysia, and RM920 per month or RM4.42 per hour for Sabah, Sarawak and Labuan.

Since the mid-1990s I have been writing about the need for a minimum wage and 20 years later it happens.

But then 20 years ago I was talking about a minimum wage of at least RM1,200 per month, which by now, 20 years later, should be not less than RM2,000 per month, double what the government proposes.

The problem, though, is that employers and manufacturers have been resisting this move on grounds it would make Malaysia uncompetitive compared to its neighbours.

Car Sales Showroom

I remember back in the 1980s when then trade minister said that Malaysia should no longer be promoted as a low-labour-cost destination but as a skilled-workers destination.

Trade missions had for years been promoting Malaysia as a low-labour-cost and ten-year-tax-holiday destination while Singapore was promoting itself as a highly-skilled-worker destination.

But Malaysia won because we imported low-cost workers from neighbouring countries to do the work at very low salaries that Malaysians would not want to do.

Then we complain about too many foreign workers and too many illegal immigrants in the country.

Why do you think that happens and who is to blame for it?

I started working as an apprentice in 1970 and my salary then was RM105 a month.

However, I spent more time washing cars than getting trained so after a year I left to do motor engineering.

After my AMIMI exams I joined a Bumiputera company at RM250 a month.

That was in 1973.

But our needs then were very basic.

We only had our car to pay for, which took half our salary.

Factory Workers Malaysia

Today, life is so much more complicated and just our mobile phone, internet, pay/cable TV, and so on, takes away more than that.

Basically, today we have more luxuries and therefore more expenses to pay for compared to 30 or 40 years ago.

Cars then were literally coffin-on-wheels with no safety features at all so they could be built cheap.

Today you no longer drive a car.

You are driving a computer.

Of course, I am looking at things from a simple ‘kampung economics’ point of view.

I am not talking about GNP, GDP and all those things that fishermen and farmers do not understand.

When you talk to a kampung person you relate it to kos Haji, kos ikan, kos ayam, and so on.

Dulu Honda Cub atau Yamaha tak sampai RM1,000.

Sekarang RM5,000.

That is how kampung people look at things.

There is no doubt the world has become a very dangerous place.

Just going out drinking with friends you run the risk of being killed in a terrorist attack.

So defence and national security costs us billions every year and it is still going up.

So the world has also become a very expensive place.

It costs a lot just to live and as expensive if you die.

Of course, the government can increase the minimum wage or even double it.

But then inflation sets in and prices increase even more and your extra salary still does not go far.

IJN Malaysia

Some say the solution is to change the government.

Okay, let us say we do change the government.

Has Pakatan Harapan explained how the cost of living is going to come down or how our salary that does not go far today can go farther once Pakatan Harapan takes over?

Is Pakatan Harapan going to stop spending on development, defence, security, education or healthcare so that it needs not tax Malaysians?

I remember back in the old days when the works minister explained that the government has to slowly build roads in the East Coast states of Kelantan, Terengganu and Pahang over a number of years because it costs RM1 million a kilometre.

The government can, of course, build cheaper roads that do not last so that longer stretches can be built.

However, once the monsoon rains come the roads will just break up.

At that time we ‘ooo’, ‘aaa’ and ‘wow’ when the minister told us that one kilometre of road costs RM1 million to build.

Today we are arguing about whether one kilometre of mass transit railway lines should be RM1 billion or half that price.

What happened to the RM1 million per kilometre that awed us so much back in the old days?

How times have changed, as have costs. – Malaysia Today

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Raja Petra Kamarudin or RPK, cousin to the Selangor Sultan, is one of Malaysia's earliest online 'citizen journalists'. He started his website in 1995 before the internet 'explosion' triggered by the Reformasi movement in September 1998. Malaysia Today was launched as a blog in August 2004 and is one of the few pioneer blogs still active and posting articles on a daily basis 24-7. RPK, 66 years old, has been writing since 1990.