LETTERS: The current Consumer Price Index (CPI), which measures inflation rates by picking up the prices of products purchased by households, usually urban consumers, is sometimes referred to as the cost-of-living index.
The CPI may be lower than in other countries such as Singapore, the United Kingdom and the United States, and this is due to the fuel subsidy, other subsidies, price ceilings and control measures, which do not really reflect the cost of living.
As producers have to bear the brunt of price increases in livestock feed and labour shortages at the factory level, this results in a higher producer price index that producers tend to pass on to consumers. High producer prices mean consumers will pay more when they buy.
The government's action of distributing cash transfers to low-income consumers is a short-term measure designed to delay the immediate effects of inflation on people. However, it is not sustainable.
This year's subsidies cost the government about RM80 billion. The Domestic Trade and Cost of Living Ministry should do much more with its price monitoring mechanism, using technology and innovation to collect data on price hikes and not merely rely on volunteers' feedback.
In the United Kingdom, the consumer organisation, Which?, recently discovered in their monthly supermarket inflation tracker that prices of supermarket own-brands have risen more sharply. Although they still tend to be cheaper, Which? is calling out to supermarkets to commit to clear pricing, better access to budget ranges in all their branches, and offering promotions for those who need them the most.
Which? tracks and compares the prices of 20 popular categories of food and drink products at eight major supermarkets to see how inflation is impacting everyday products. The figures are weighted based on supermarket market share and sales volume for each product category.
The tracker is able to pinpoint which supermarkets have the highest and lowest inflation every month, which types of food and drinks are rising in price the fastest and how branded groceries compare with own label ones.
Therefore, we hope the government will consider these proposals:
ESTABLISH a comprehensive Food Price Index that is averagely weighted and derived from a networked national supply chain data management platform that links farmers, producers, and retailers;
TARGETED fuel subsidies for those in the B40 group and the lower M40 group must be implemented as soon as possible. The Department of Statistics Malaysia (2020) revealed that nearly 580,000 households fell from the M40 to the B40 group in 2020 and may now be bordering between the B40 and M40 groups. We need to address this because people losing part of their income is contributing to the cost of living as well;
COMPANIES have to make their products more affordable. The government must intervene to discourage profiteering and ensure farmers', producers' and consumers' interests are taken care of. Big supermarkets have the ability to make a difference to people struggling through one of the worst cost of living crises; and,
A TRANSPARENT system of issuing approved permits directly to retailers to prevent manipulation in the supply chain.
Datuk Indrani Thuraisingham
Secretary, ERA Consumer Malaysia, Petaling Jaya, Selangor
The views expressed in this article are the author's own and do not necessarily reflect those of the New Straits Times