As Budget 2018 looms, people’s lives reflect cracks in economy

Sheridan Mahavera

Fishmongers at Chow Kit market in the heart of Kuala Lumpur. The Malaysian Institute of Economic Research (MIER) describes 2017 as the year of high prices which have hurt consumers’ purchasing power. – The Malaysian Insight file pic, October 25, 2017.

AZMAN Razak has a diploma in automotive engine repairs but the 23-year-old has not had a proper job since he graduated three years ago from a technical college.

He and his friends have applied to countless factories with their diplomas, which are similar to the qualifications the government has encouraged through its TVET (technical and vocational education and training) initiatives.

But they were turned away every time by these firms, not because they lacked the qualification but because these companies – including big firms like Proton and Toyota – preferred to hire foreign workers.

Azman’s experience and that of other individuals The Malaysian Insight spoke to reflect the cracks in the Najib administration’s economic strategy as it prepares to table its latest budget on Friday.

These flaws in the economy will challenge the government’s ability to deal with problems, such as high youth unemployment and inflation, through the budget.

The administration had asked for feedback from Malaysians on what they wanted to see in the budget.

Market research firm Ipsos Malaysia conducted a study among 952 consumers in late September on what they wanted the government to focus on in Budget 2018.

The study found that the top-most concern was the high cost of living at 55%. The second most pressing issue was the lack of affordable housing at 42% followed by tax reductions at 37% and economic growth at 26%.

The Malaysian Insight’s interviews with Malaysians and those who wrote on the prime minister’s website mirror these findings.

But it also revealed how the government’s solutions to problems, such as youth unemployment and rising inflation, are being hobbled by its own policies.


Azman the technical graduate is aware of this contradiction between what the government says and the reality on the ground.

The Johor native said the government tells youth like him to learn skilled trades so they can get good-paying jobs.

“But when we graduate and apply for these jobs, the companies tell us they’ve filled the job openings with foreign workers,” Azman said when met in Shah Alam where he lives with his elder brother.

The government said there are 1.7 million legal foreign workers in Malaysia. The administration has allowed export-oriented manufacturers to apply for a 100% foreign workforce.

“When we do nothing, society is angry with us but when we go out to find work after studying, there is no work for us. So, what’s the point of going to school? All we’ve gotten is debt from PTPTN (National Higher Education Fund).”

Pensioner Yusof Mohamad’s experiences as a pisang goreng seller exposes another contradiction.

The government wants low-income earners like him to open micro-businesses like food stalls to make extra cash. But when they do so, they get harassed by the local council because they can’t get proper licences.

“I’ve applied countless times, I’ve gone through every step of the process and met the MBSA, (Shah Alam City Council). But I still can’t get a business licence. And when I get raided, they carry all my things away.

“Both the state and federal governments have to work together to make it easy for people like me to set up businesses because in these hard times, we need the extra cash.”

Shrinking ringgit

Civil servant Hana has seen the value of each ringgit she earns progressively shrink over the past eight years even as her salary keeps increasing.

“When I used to earn about RM1,000 a month, I somehow still had enough left over to give my parents and put away savings for myself,” said the 39-year-old.

But the pay raises Hana’s received have not kept up with the rise in prices for baby formula, nappies and nursery fees. 

“Now I am earning more but I have not been able to save much and I can’t give as much to my parents. So, I want the government to do something about our wages or control prices.”

The Ipsos report said the government’s own data showed that the consumer price index (CPI) rose 0.6% to 4.3% in September 2017, compared with 3.7% in August 2017 on a year-on-year basis.

Recently, the Malaysian Institute of Economic Research (MIER) described 2017 as the year of high prices which have hurt consumers’ purchasing power.

Sales executive Malinda Jamal wants the 6% goods and services tax (GST) scrapped as it hikes up the prices of everything.

“The government said prices will come down after the GST but nothing has come down. Things have instead gone up. Because when petrol prices go up, other goods go up as well.”

Writing on, Richard Samie wants civil servants salaries to go up by 4% in tandem with the inflation rate.

Ravidasan echoed this suggestion for civil servants, saying that allowances for should be raised to help deal with rising living costs.

Another commentator, Looi Kok Wah, urged the government to allocate more funds for primary care services at government hospitals.

“Primary care is the gateway to healthcare services and can effectively reduce the total national healthcare expenditure.”

Mohamad Faisal wanted the government to give tax rebates for everyone earning RM50,000 a year and below, instead of it just for the RM25,000 income bracket.

“Tax exemptions for single individuals should also be increased to RM12,000 from the current RM9,000,” Mohamad said.

About 37% of those in the Ipsos study wanted the rate of GST and other taxes reduced.

Malinda also said the lack of affordable homes is another big problem for adults in their 30s such as her.

This issue was the second most pressing concern among respondents in the Ipsos report at 42%.

“Me, my siblings and friends have all tried applying for PR1MA houses,” said Malinda of the government-initiated 1Malaysia Public Housing Scheme (PR1MA).

PR1MA homes are priced at RM400,000 and below and targeted at first-time buyers.

“But only one person in my circle was accepted,” said Malinda. – October 25, 2017.

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