In the New Malaysia era, Malaysians pin their hopes on the government to improve the economy, increase employment and their purchasing power, reduce prices of goods and services, and taxes, as well as to control inflation.
Well, as powerful as the government is, achieving all these is not easy, at least not for the time being.
Most economists are of the opinion that Malaysia’s economic growth is quite slow due to global macroeconomic concerns, which are expected to recede in a few years’ time.
One of the most worrying economic issues is the cost of living.
In general, inflation is a measurement of purchasing power and the increase in the cost of living.
To measure inflation, the Consumer Price Index (CPI) is used. Every month, the Department of Statistics Malaysia (DOSM) will publish the CPI to inform the public of price changes in certain items.
We did a study on the CPI published by DOSM from June 2017 to June this year on some of the items from the Food & Non-Alcoholic beverages’ basket.
These items were selected because they were essential items for a typical household, especially those from the bottom 40 (B40) group.
A Khazanah Research Institute (KRI) study showed that the B40 group spent 95 per cent of their income on consumption items in 2016.
In general, there has been a fluctuation of prices within these two years. Take vegetables and fruits, for example:
Spinach averagely priced at RM4.30 in June 2017, cost RM4.66 in June this year. Chilli (burung/padi) had cost an average of RM2.31, but now costs RM2.84.
Round cabbage cost RM3.96 (now RM4.34). Cucumber cost RM3.74 (RM4.09) and pisang berangan cost RM4.05 (RM4.68).
The prices of items like grade C eggs and meat had also increased.
For chicken and Indian mackerel (fish), there is a decrease from RM8.84 and RM13.85, respectively in June 2017 to RM 7.84 and RM13.80 in June this year.
The average prices shown in the CPI may not be relevant enough to measure the exact general cost of living due to many factors, but from observation, the prices of goods and services have been fluctuating through the years.
This fluctuation proves that it is common for prices to increase and decrease. Prices change due to seasonal changes in demand and supply.
The current crucial problem in the economy is that it has severely affected the low-income group.
The B40 group is living on hard times, especially those categorised under urban poverty.
The high cost of living, stagnant wages and low purchasing power are pressuring the people mentally, physically and emotionally.
That is why the government needs to come up with effective and efficient regulations on price control and boost enforcement to protect the poor from the pressure of the high cost of living.
The National Cost of Living Council (Naccol) has come up with a project called BA100 that aims to monitor and reduce the prices of 100 consumer items.
The list of the 100 basic necessities has not been published by the government.
The programme will help farmers and fishermen to market their products without middlemen.
This way, the government can prevent the producers from going out of business due to unprofitable supply.
However, the government still needs to help these groups of people by increasing wages in accordance with the cost of living.
To sum it up, prices and cost of living are two subjects that are always in motion and unlikely to be fixed.
It is a common phenomenon that prices of goods and services fluctuate due to the change in demand and supply.
Therefore, more should be done by the government to help improve the people’s lives.
For a start, it could push for liveable wages where the minimum income of workers match the basic cost of living.
The writer is a researcher at the Institute for Research & Development of Policy