PETALING JAYA: The country should go back to basics and focus on the agriculture sector and improve the public transport system to tackle the rising cost of living, among other measures, say stakeholders.
This is in addition to the government providing subsidies, price controls, and importing more.
The most pressing issue at this juncture, they said, was the shortage of food items such as chicken and eggs, and the rising prices of vegetables due to the wet season.
Federation of Malaysian Consumer Associations (Fomca) chief executive officer T. Saravanan said although increasing imports would help stabilise prices, Malaysia was too dependent on food imports.
He said in 2002, the country spent RM55.5bil to import food, while exports were at RM33.8bil.
“Therefore, agriculture is the long-term critical solution to ensure food sufficiency. We have ample land and places for us to do agriculture.
“Somehow, in the last 20 years, we have moved away from agriculture.
“We need to get back to basics,” he said, adding that idle land should be used for the purpose.
Saravanan said agriculture will also have a chain effect such as increasing livestock breeding.
“We can cater to our own needs. Who knows 10 years down the road, we might be exporting food,” he added.
He also said it was important to have a vibrant food security council with members who could think outside of the box and “have the guts to” bring about changes, adding that there should be increased participation of industry players.
On having an efficient public transport system, Saravanan said, “When you buy a car, you need to look into maintenance, mortgage, road tax, petrol and parking.
“The government’s agenda is to look into how public transport will help reduce this cost, but it must look into measures to improve public transport,” he said.
Saravanan said childcare was also costly, therefore, another solution would be for the government to subsidise nurseries so that parents can afford it and at the same time be secure over the care given to their children as these centres would be under the auspices of the government.
Ahmad Yazid Othman, a member of the National Cost of Living Council (Naccol) and a fellow of the Malay Economic Action Council, suggested the impact of the Overnight Policy Rate and exchange rate be looked into.
He said stabilising the exchange rate was also key to managing the cost of imports.
“While importing more may help in the short term, we will only create dependence on imports that are all done in US dollars and dominated by well capitalised traders.
“The government should get companies to produce more food locally and only import or subsidise imports for essential food items and food inputs,” he added.
Ahmad Yazid added that delaying the minimum wage was helpful for small and medium enterprises (SMEs) in the short term, but would not help workers address their concerns as their rents and cost of essentials were increasing.
“The fact of the matter is, our wages have been low for too long and cannot be ignored,” he added.
He said there have to be more discussions on how to increase people’s income and reduce the cost of living.
Prof Geoffrey Williams of Malaysia University of Science and Technology said there was a need to move away from price controls and subsidies, and towards targeted income support through a universal basic income.“There will always be a reason given by producers to raise prices – this time, it is the weather. Businesses should be careful about exploiting inflation expectations to increase prices sneakily because consumers will push back,” he said on rising vegetable prices.
To address possible shortages in the domestic production of vegetables, the government should open up the market for imports – first to support supply and stop shortages, and second to force local producers to compete and keep prices down, he added.
However, Prof Williams said the government was making good progress in addressing the cost of living.
“First, freezing electricity tariffs will cut inflation by around 0.3%. It will affect all households and 98% of companies.
“Second, addressing cartels and monopolies and improving supply through imports sends a clear signal on freeing up the market to create more competition. This will help keep prices down,” he added.
The government said it is refining several quick-win solutions to tackle the cost of living issue, set to be implemented next month.
Several measures have already been taken, including maintaining the electricity tariffs for domestic, commercial and industrial consumers, as well as price controls and subsidies for standard chicken and Grade A, B and C eggs for a set period.
It is understood that five working papers were tabled at the Naccol meeting on Dec 13. The issues discussed included subsidies, the foreign worker shortage and importing eggs.