What can we already expect to happen in the near future?
Malaysia’s ringgit climbed to a two-week high, reversing an earlier decline, after an official said the government will announce measures to strengthen its fiscal position. Sovereign bonds climbed.
“The fact the announcement was made just weeks before the annual budget shows that one of the objectives is to defend the ringgit,” said Song Seng Wun of CIMB Research.
“They want to contain it from sliding further.”
Malaysia raised fuel prices for the
Malaysia cuts fuel subsidies for the first time in more than two years as it tries to cut its budget deficit.
“It’s a process of fiscal consolidation. The market will feel more confident if we can bring down our fiscal deficit,” Najib says.
“The fuel price increase is quite substantial,” Rahul Bajoria, a Singapore-based economist at Barclays Plc, said by phone yesterday. “This move will be taken as positive, but there is more to go. It’s probably a sign that the administration is acknowledging that there are concerns around the fiscal position and they are starting to move in the right direction. They need to do more.”
“To reduce the burden on the low income and vulnerable groups, following the fuel subsidy ratianalisation, BR1M will be increased in the Budget 2014, of which the new quantum will be announced in the upcoming budget,” Najib said.
“It is just a one-off thing. How often can you do this? It cannot address the problem of price increase of goods which will affect the livelihood of people,” the DAP member of parliament argued.
DAP has expressed concern over the 20-sen hike in RON95 and diesel prices, pointing out that the medium and lower-income groups will be the hardest hit, despite the government promise of cash payouts to the poor to tide them over.
The government will announce measures to ease the burden of the middle income group in the 2014 Budget. “We will also plan something for the middle-income earners as they complain that they are also feeling the pressure in terms of cost of living.”
Real Estate and Housing Developers’ Association’s (Rehda) immediate past president Datuk Ng Seing Liong says, “Buying a property, such as an affordable house, should be the main priority among youngsters and they should not wear out their salary in owning a car.”
“Buying a property, such as an affordable house, should be the main priority among youngsters and they should not wear out their salary in owning a car,” he told Bernama today.
Prime Minister Datuk Seri Najib Tun Razak said the private sector is the engine that will drive the nation’s future growth.
He said that corporate leaders had to continue to show leadership to ensure Malaysia’s sustainable growth as the Government could not do it alone.
Some state building projects with high import content will be delayed to help address the narrowing current-account surplus, said Najib. The government has yet to decide which ones, though it won’t include a planned subway in Kuala Lumpur, he said.
Bayan Baru MP Sim Tze Tzin said he expected that inflation would creep in over the coming months.
He said that the relationship between oil prices and inflation was prevalent in economies such as Malaysia. “The people rely heavily on subsidies, especially fuel subsidies.”
Najib says, “Currently, inflation is still low. We expect that its effects will not be to the public’s detriment. Perhaps the rise (in inflation) will not be that high.”
Malaysia’s move to raise pump prices for petrol and diesel will push the inflation rate further to 2.2% from the current 2%, RHB Research Institute said in a report today.
Federal Territory and Selangor Taxi Operators’ Association president Datuk Aslah Abdullah said although cab drivers in urban areas such as Klang Valley and Kuala Lumpur might not feel the pinch, drivers of hired cars in the rural areas would be hit hard.
Malaysian Taxi, Limousine and Rental Car Operators and Drivers’ Association vice-president Mohd Shahril Abdul Aziz concurred, saying that the rise was “too high” and cost would be passed on to the public.
Pan Malaysian Bus Operators Association president Datuk Mohamad Ashfar Ali said the rise in diesel price would have serious impact on the industry.
“It will definitely have a multiplier effect. I suggest that the Government consider doubling up the subsidised diesel quota that we are currently getting,” he said.
“However, the Mass Rapid Transport (MRT) Lines 1, 2, and 3 will proceed as planned.
“The Southern Corridor High-Speed Rail project is still under negotiations,” he said
We can consider carpooling more. Less traffic jam. More hope for singles. More chance for friendships. We can push our MPs for better public transportation. Maybe even learn from our Southern neighbours who may be kiasu on many things but you gotta hand it to their MRT and bus systems.
Asked if the Fiscal Policy Committee discussed about the impending Goods and Services Tax (GST), Najib did not provide a direct answer.
Instead, his curt response was that the matter would be raised during Budget 2014.
The GST Bill was tabled in Parliament on December 2009 to replace the current sales tax and services tax.
“The government should take advantage of the current economic environment where there is growth, full employment and low benign inflation to introduce the GST. “There can never be a good time to implement hard reforms but we can’t ask for a better economic environment,” says RAM Holdings Bhd group chief economist Dr Yeah Kim Leng.
“It is a must, not an option. We are trying our very best to include it in this year’s budget,” says Ministry of Finance Secretary-General Mohd Irwan Serigar.
When the GST was introduced in other countries, it came with a reduction incorporate and income taxes.
“But in Malaysia’s case, it’s different as the sales and services tax is in place. The concern now for Malaysia is whether traders will increase prices to their whims,” he said.
GST operates on a negative concept – all goods and services are subject to GST unless specifically exempted. For sales tax, the same concept applies where all goods are taxable unless specifically exempted. It is anticipated that the number of exemptions under the present sales tax regime would be significantly reduced.
Among other moves being hinted at are the introduction of the goods and services tax (GST), and reforms in the electricity tariffs.
Potentially, the government could raise the fuel prices again six to nine months down the road and twice for 2014.
Related stories you should read
Remove Excessive Weight from Your Car. Every 100 pound (approximately 45 kilogram) reduces your fuel economy by about 2%
The RM0.20 price hike was announced by PM Najib Razak at his office on 2 September 2013. What are our leaders saying? [CLICK FOR FULL STORY]
Which one of these reactions is most similar to your own in regards to the increase in petrol prices? [CLICK FOR FULL STORY]
- IRGC Blames ‘Some’ Iranian Neighbours for Staging ‘Acts of Mischief’ During Petrol Price Hike Riots
- Our fuel price hike story, by Kachikwu
- Angry protests erupt across Mexico after 20% hike in gasoline prices
- 'You Will Not Have an Easy Life...' Iran Warns Regional States of Consequences if They Stoked Unrest
- Maruti Alto 800 BS-VI Spotted Testing Even After Launch: Spy Pics
- Retail sales slump dashes hopes for quick Australian economic rebound
- Scots shouldn’t be fooled by the oil-price naysayers
- Blocked roads then bullets: Iran's brutal crackdown in its City of Roses
- Iran's Guards call for 'maximum punishment' of fuel unrest leaders
- Iran says pro-government rally to show the 'real' Iranians
- Iran stages pro-government rallies after days of violent unrest
- Maharashtra Coup: Opposition likely to boycott joint sitting on Constitution Day
- Bengaluru airport helps create world's largest flower carpet
- The Guardian view on Iran’s protests: unrest is crushed, unhappiness endures
- border closure: Obasanjo backs Buhari
- Iran says 200,000 took to streets in anti-government protests
- HRW charges Iran ´covering up´ unrest deaths
- Iran says 200,000 took part in anti-government demos; lawmaker says 7,000 held
- Iran Arrests 8 People 'Linked to CIA' During Street Violence
- Honda City 2020 Vs Old Honda City: Here Are All The Major Differences
Petrol Price Hike: What's Next? Yet Another Price Hike? have 1339 words, post on says.com at September 3, 2013. This is cached page on Konitono.News. If you want remove this page, please contact us.