Wednesday, June 1, 2011

Waking up to 'Super June' nightmare

A Sobering Article by YB Saudara Charles Santiago

MP SPEAKS Here is a ragbag of grievances of the man on the street in Malaysia - on the non-thought out reduction of subsidies, hike in the price of gas and power tariffs, plus spiralling costs of food and essential items.

Despite the BN federal government's garbled statements to justify the subsidy slashes, the vexed question remains - why is the public forced to carry the financial burden when Prime Minister Najib Abdul Razak's government carries on with failed privatisation policies and continues to bail out cronies such as the Independent Power Producers (IPPs) and Selangor water-bond holders, among others?

Power producers headed by tycoons like Ananda Krishnan, Syed Mokhtar Albukhary and Francis Yeoh will continue to get a subsidy of RM19 billion.

Let's look at what the rakyat will receive from the government - a hike in electricity tariffs which will go up by 7.12 percent from today, forcing Malaysians to brace for higher inflation.

The price of natural gas will rise by RM3 per million metric BTU every six months until it reaches the market level.

From today, the government will also remove the super-subsidy on diesel for nine categories of commercial vehicles.

In addition, the Association of Malaysian Hauliers will raise its haulage tariff guidelines by 20 percent.

The waiver on charges for domestic users of electricity who record less than RM20per month will cease in December. There are 900,000 users in this category.

The government says the subsidy cuts and tariff hikes are crucial to trim its burgeoning subsidy bill and plug the budget deficit.

So why hasn't the government withdrawn the RM19 billion subsidy to the IPPs and cronies?

Good question.

Umno leaders and Najib want to sugar-coat the move, even though it is clearly the government's way of passing on the burden of decades-long economic mismanagement to the people.

In an immediate response to the removal of the super-subsidy for diesel, Pan-Malaysia Lorry Owners Association immediate past president Er Sui See said operators will almost certainly pass the additional fuel costs to consumers and manufacturers, as profit margins will be badly affected.

Tenaga Nasional Bhd shares the subsidies with the IPPs. Some 5.49 million households will be hit when suppliers, shopkeepers and food manufacturers 'absorb the increase' in electricity tariffs by passing these to the public.

Frightening price scenario

Malaysians will have to further tighten their belts as the prices of food, goods and services will go through the roof.

Food prices in the country have increased at more than twice the rate of global food prices in the first four months of the year.

A study by the Federation of Malaysian Consumer Associations notes that food prices of the eight most-bought vegetables has increased between 40-60 percent between last September and April this year.

The working class in Malaysia has been burdened with stagnant wages for the last 10 years, with wages going up by just 2.6 percent between 2000 and 2010. But the cost of living is going up with increase in price of essential items like sugar, flour and cooking oil.

The price of onions has quadrupled from 32 sen per kilo while the price of dried chillies has doubled from RM1.80 per kilo.

Other food items which show a significant increase are sugar at 10.2 percent more; vegetables at 8.1 percent; and rice and seafood at 1.6 percent. The prices of food and non-alcoholic beverages have gone up 2.4 percent compared to 2009.

All this has put a huge burden on household grocery bill, as a significant 40 percent of households earn less than RM1,500 a month.

And Malaysians would be forced to pay an extra 30 percent on each food item compared to 2005, by the end of this year.

Thousands will be pushed into poverty and stress will be exerted on the most vulnerable communities, who spend more than half of their income on food.

Since taking over the government, Najib has been parroting his 'People First' slogan. But clearly his loyalty lies with the ruling elite and cronies who would continue to make and enjoy huge profits at the expense of further impoverishment of the majority of the population.

In this model of development it is obvious that the rich and cronies are constantly protected by the Umno-led government.

But Malaysians would have gone to sleep on the last day of May, only to wake up to a nightmare on June 1.

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