Despite election pledges, PH still vague on tackling cost of living

The cost of living problem – a bread-and-butter issue for many in the country – appears to be dragging on despite previous statements made by politicians in Pakatan Harapan (PH). 

PH chairman Anwar Ibrahim, upon his appointment as prime minister, had ordered the National Action Council on Cost of Living to examine the issue which has long plagued those in the B40 and M40 groups. 

Two weeks later, however, there have yet to be any concrete proposals by the top government leaders.

Anwar said earlier this week that the country should channel bulk subsidies to help the B40 and M40 groups as well as small traders. He also instructed government departments to develop the appropriate methods for the implementation of targeted subsidies. 

Political observer Azizi Safar said the statement meant that Anwar still lacked the means to carry out subsidies of this nature. 

"He is depending on government officials to come up with ideas on how to do this," he said. 

"After years of saying the government has failed to implement the correct distribution of subsidies to the people, you'd think that he would have an answer to the problem.

"Apparently he, too, has no concrete proposal." 

The cost of living was a major part of PH's election manifesto, which also pledged to eliminate cartels, ensure sufficient supplies, provide incentives to boost production, and review highway concessions. 

PKR deputy president Rafizi Ramli, who is now Anwar's economic affairs minister, was known for his suggestions for dealing with these issues. After his appointment to the Cabinet, he said it was time for the country to make a decision regarding the possibility of powering the retail price of fuel. 

Economist Geoffrey Williams said the bulk subsidies currently in place include some RM4 billion in subsidies for cooking oil, for producers, processors, distributors and middlemen. 

"It does not go to the people," he added. "The RM4 billion cooking oil subsidies are equivalent to a RM115 basic monthly income uplift for the B40, low-income household group." 

He said Anwar's request for the civil servants to think of a solution could be seen as polite, but added that they would fail as there are not many effective methods for targeted subsidies. 
 
Williams, a lecturer at the Malaysia University of Science and Technology, said targeted subsidies for a specific product would not work, with the exception of utilities and petrol for which prices can be set in stages. 

"Continuing with subsidies is now distorting the market," he said. 

"We must move to subsidies on income, not products." 

Meanwhile Azizi, who is also the former executive secretary for Barisan Nasional (BN) in Penang, said the government should have had a plan for targeted subsidies before setting foot in Putrajaya. 

"PH was the government for 22 months after the 2018 general election," he said. 

"They already know about the implementation of subsidy distributions, which was said to involve a lot of leakage and misdirection." 

Williams, on the other hand, acknowledged that PH's manifesto on the cost of living had no specific solution. However, he said the coalition could obtain a clearer picture of the issue now that it had formed the government. 

"The BN manifesto was specific about helping people with the cost of living through the assistive basic income scheme," he said. 

"This is a great idea and can be more ambitious to cover all of the B40 or even the B50. Within the new government, combining good ideas from everyone will make the policy agenda stronger and more inclusive."