OUR neighbours are increasingly investing in alternatives to subsidies.

Singapore, for instance, heavily spends on infrastructure to lower its logistics costs and increase its productivity. Thailand improves its land utilisation to increase food output. India provides state-produced fertiliser and transport stations for agriculture and dairy to support its farming community.

Diesel in these countries costs RM9.10, RM4.23 and RM5.36, respectively.

Why then does chicken rice in Singapore cost RM17-20, or only 30-40% more, when the price of diesel there is 300% higher, and the currency worth 3.5 times the ringgit? Similarly, why does a burger in Thailand cost the same as one here, and how is rice so much cheaper there?

You see, the selling price of anything is determined by many factors. Fuel is a variable cost, like manpower, utilities and raw materials. Then we have fixed costs - rentals and taxes and so on. Compared to fuel prices, an increase in fixed costs like wages, taxes, or the price of the lorries themselves (RM4,000-8,000 per month, per lorry), affects the selling price far more.

Any increment of 10% in other variable costs, for instance in salaries, would have a much more significant impact than the price of fuel as that has a domino effect on overtime and EPF contributions too. Conversely, these businessmen do not need the government as an excuse to raise prices.

How many times has the cost of a drink at a mamak gone up, and how many times is that relative to any tax or government action? Don’t salaries go up every year, and the owners manage the cost somehow?

And then there are targeted subsidies, which further cushion the impacts. Yes, fuel prices are up. Yes, that is an inflation factor, but these are hard, base realities that will eventually happen somehow. Expect other subsidies to go. We are truly one of the last countries that do this at all.

We need to pressure business people to stop depending on government aid to line their pockets and grow ridiculously rich at the cost of tax dollars. They can use a dozen strategies to lower costs or even loss lead. But many choose to just use these as scapegoats while an unthinking rakyat rallies around them. Sadly, the present government also participated in this when it introduced the GST and previous price hikes.

There’s the collective power of consumer bargaining. If the past couple of months have taught us anything, it is that Malaysia’s favourite fried chicken could have given us bigger drumsticks, the leading coffee speciality shop could have sold us two coffees for the price of one, and a burger joint facing a global boycott could have dropped their prices a couple of ringgit and still survive.

If a local coffee chain can make a profit serving coffee under RM10, and a Chinese company can sell you an imported lemonade for less than the price of a limau ais at the mamak shop, doesn’t that make you wonder about the profit margins of the companies that grow richer despite recessions, boycotts and pandemics?

These are questions we should be asking now that we were less equipped to ask 10 years ago, under different global circumstances.

While we rightly push for the government to be responsible and thrifty with our money, so should we exercise our right to pressure greedy corporations, including cartels and monopolies not to profit under the cloak of politics.

If the government is not going to make us adopt thriftier lifestyles, we should stop subsidising profiteers. – June 20, 2024.

* Emmanuel Joseph firmly believes that Klang is the best place on Earth, and that motivated people can do far more good than any leader with motive.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.