Is the Rising Cost of Living All In My Head?

Good evening. It is just about 606 and you're with Li Chui Lin and welcome to the show that puts you at the heart of the big issues shaping our world. Tonight the focus is on the cost of living here in Malaysia. It's a perennial complaint. The cost of goods, food, simply existing has gone up. Life feels expensive. But the government has responded with cash handouts and in fact with reminders that they have cracked down on price monitoring. So this evening, we want to unpack whether the cost of living really is ballooning. And if so, what measures could be taken to help? Joining me now are Professor Emeritus Dr. Barjoai Bardai, economist and dean of postgraduate studies at the Malaysian University of Science and Technology. And Dr. Mary Muthu Nadasan, president of Consumers International and FOMCA, the Federation of Malaysian Consumers Association. Gentlemen, thank you for joining us. Welcome to the show. Thank you. Thank you. So let's start then with this. Do you think that the cost of living in Malaysia has gone up significantly? And how does it compare to our regional neighbors? Barjoai, perhaps we'll begin with you. Yeah, okay. If we look at the trend in 2005, the average annual household expenditure was 26,000. And in 2025, it is now about 82,000. So it has gone up for more than 3.5 times actually. At the same time, income also grows, actually income grown from 30,000 in 2005 to 95,000 annual linear. So it has gone by about 3 times. So the issue is that the growth in income is slower than the growth in expenditure and that worries everyone. So that actually the income is catching up from behind and trailing. And that is the worrisome because household finding that they are being trapped into this fine hole deeper and deeper. Marimo, what is your perspective on this issue of cost of living and whether it's gone up? Yeah, as long as some guys concern the cost of living is very, very high currently. I think so everything has to go up, especially you can't buy anything with entering it much. Okay, that's one. Second, if comparison, if you look at the purchasing power, I've gone down. People are compromising on their heating habits. Even people are cutting down on their medication because they can't afford. People are even cutting down in continuing their studies. And people are really facing hardship. If you go like we used to do price monitoring from our side. If you go to the Pasa, the wet Pasa, you can see people are not buying one kg, half kg or anything. People are just buying one or two fish cut into eight pieces then buy two bandis. It might be two brain jaws and onion two and other stuff for cooking day to day. They are living day to day because you must understand our wages have never gone up. Although there's a minimum wage of 1,700 but it's too little especially people run climbally and many other towns and also in small town. Okay, I came from typing. My hometown is from typing. Although we can see it's a middle income town per se, but the costs have really gone up. People can't even afford to go out and eat anymore. And especially if you look at youngsters, those who are earning like 3000 and below, they all are living on their parents subsidy subsidized. We got to go to boys. I know we need to subsidize them because they can't earn much because the wages is not so high. Prof, on that, we're continuing to contextualize it. The latest data from the Department of Statistics shows that inflation rose 1.2% in July. If you help us put those numbers into perspective, how much of this is actual, I guess what does that inflation mean in terms of rising costs and how much does it then affect our perception of those costs going up? Okay, I mean, inflation is measured as a basket of good. And that basket comprises of all the expenditure item, especially the housing, food, transport, and personal care and so on. So actually, the overall inflation rate has not gone up that far. I mean, we are at 1.3% overall in inflation. But if we look at the specific item on food, for example, especially food taken from the restaurant or taken home, the food are still increasing at over 4%, some at 6%. And that is the issue. The issue is the basic expenses. Malaysian spend more than 80% of our income on food. And then also another nearly 2% on restaurant. So we spend 20% of our income on food. And if this food price goes up, it will be reflected overall for the personal expense. But overall, when we look at the general inflation figure, it doesn't show because it is only growing at 1.3%. For example. Marimo, do you touched on this earlier with the example of the pasar and how people are shopping? What are you actually hearing from everyday Malaysians about these cost of living struggles? Who is being affected the most? Cause of living especially, definitely the low income group. They are suffering the most because some even unemployed, they can, they are depending on day-to-day income, like those who are driving grab and other earnings. And those who are also working, young graduates getting below $3,000 in cleanly, they are suffering. But the most important thing is that literally if you go down to the ground, if you go down to the ground, you can see people are just suffering because we are going down to the ground most of the time. And always we are seeing this is a reality. That's one. We don't see our 2.3 department members really going to the ground. I don't know whether they know the constituents very well or not. And what are they doing? Okay. So then, and of course, statistic department give any statistic that is their job. Let them give the statistic. But the ground reality is completely different. People are just, you can even ask clinics or medical doctors that people are patients are not coming in. Because people are just self, they're going in buying medication and being a treatment by themselves because they can't afford to go in. So if you look at it, the ground reality is bad because I think I use public transport. I meet many people, I speak to people and that's the reality. And I go marketing. Since I got married, you know, that's why I think I'm present for some movement. I do marketing for my wife. So, that's the issue. We need to know what's happening at the ground. If I can add on that, actually today, it is very difficult to not spend more than 2,000 to live quite comfortably. And actually, very few percentage of our consumer that can really spend less than 2,000. Most people spend between 3,000 to 5,000 a month on general expenses. And we've seen attempts to try and manage that, which we will come back and talk about. I'm speaking today with Professor Emeritus Dr. Barjoaibardai, who is an economist and dean of postgraduate studies at the Malaysian University of Science and Technology, as well as Dr. Marimuthu Nadisan, president of Consumers International and FOMCA. If you have a question for my guests, do send it our way, but also share, do you feel that cost of living has gone up? How would you like to see it addressed? You can call us, double-seven, double-three, two-nine-hundred. Tweet us at BFM Radio and send us a voice note or WhatsApp at our UMobile number, 0187898899. We will be back on the big issue very shortly, BFM 89.9. It is 6/18 and you are listening to the big issue with Lynn tonight. Our focus is on the cost of living here in Malaysia and my guests are Professor Emeritus, Dr. Barjoy I. Bardai, Economist and Dean of Postgraduate Studies at the Malaysian University of Science and Technology and Dr. Marie Muthunadasen, President of Consumers International as well as FOMCA, the Federation of Malaysian Consumers Association. If you would like to weigh in and ask a question about cost of living, do send it our way but also do you feel that cost of living in our country has gone up and how would you like to see it addressed? Call us, double 733-200, send us a voice note or WhatsApp 018-789-2899 and tweet us at BFM Radio. Now gentlemen I wanted to talk about some major measures that have, okay on the one hand, affected on the other hand, attempted to address cost of living issues in Malaysia. Let's start with the SST that came into effect in July. At the time, the government had to revise the exemption list because of an influx of public feedback. Marie Muthun, what did you make of this announcement in regard to the rising cost of living? Did any consumers voice concerns to your organisation? See, regarding the SST, I think the current government, I think so, their magnesium that the way they've been operating is that they are collecting from the Raya and they just give back something to the Raya. Actually, there's not for a layman at the ground, they are not seeing any of the strategy which they are applying to address the cost of living is effective currently, even for petroleum, although they can put 1.99 but people must understand that our public transport system is not sustainable. So people have to buy car, have to use more petrol to do whatever they need to do, either to go to work or family to move around or whatever activity they want to do. We can see clearly, majority of Malaysia do not have much saving. Also, debt is close to 84-85%. You can see that, that's too clear. And tax after tax, you can see in this year alone we have water hike, electricity, indoor water. You just name it, everything I've gone up in terms of 6 to 7 or 8, 9 per cent also in certain areas. And with this SSD, it's also burdening, especially the low income group a lot. One can say that electricity tariff is not been the lower income group, have not been affected. But today we must understand every household as an air condition because we cannot deny it because of weather. And easily people are spending something like 3 to 4, only electricity alone. So one can see that, what is the taxation on everything, whatever we pitches, whatever we pitches, the tax is there. Nothing is free today. So literally people are finding it tough to leave this day, not like in 60 or 70s or 80s. The only 80s was the best term I think so when I was growing up on 90s we can seal it. And completely in current years you can see that the government also have given up a lot of responsibility. Example, you can see through the PDP10 under person loan. Now what are they giving it? 60, 70. And you use it in one can understand. So young graduates cannot afford to buy houses anymore. Here is like skyrocketing. The medical insurance is growing up. People can afford it. People have to depend on the government system. Government can't provide that. If the riot is going to compromise on their quality of eating, then you see more patients in the hospital, more chronic illness, we are buying. So the government has seriously addressed many issues, not just at one time and undering it, that do not solve the problem at all for everyone, especially even the middle income group currently. We'll get to that 100 ringgit. Prof, I wanted to get you to respond to that. I mean, what's your take on the implementation of the SST, particularly in terms of, you know, the government's argument of needing to inject cash into our tax coffers, but also its impact on consumers. Okay. Well, SST is a consumption tech. And a consumption tech is an indirect tax and hands however you try and do it, it will be regressive. It is regressive means that the lower income group will pay the relative higher rate than the high income group. That means that as long as we are relying on consumption tax, we will make the thing worsen in terms of inequity position. Of course, the best tax is the income tax, but income tax is also some limitation. In Malaysia, we were doing all right with the GST, but the problem with GST is the psychological effect. GST should have lowered the price because GST was a tax on the value added, not the whole price. Unfortunately, our retailers are not helping. Our retailers have been taking advantage of the new system and they do not reduce the price. Even though they should have reduced the price because their input costs has gone down. So as a result, the consumers were suffering, but the psychological effect is because the tax is stated in the bill in the cheat that they get after they pay the bill. So we get back to SST because we want to try to solve that psychological effect on the consumer. But actually SST is a more burdensome tax because it is a tax that have a problem of snowballing effect. That means there will be tax on tax and so on. But we can actually, now that we are in a good trend in implementing SST, we could modify SST, make it a tax with credit, and that may solve the problem. And if the retailer is supporting, they could maintain the price. And in the end, we can see lower price and better service to all households. Do you think that this is likely to occur? I mean, is there a sort of push in this direction at this moment in time? Yes, there is actually the group is working on it, but we need to be more focused. We should not divert the attention to try to go back to GST because going back to GST will create another new development cause and so on. Just focus on SST, introduce the credit system so that only the retailer will pay the SST and then the retailer when they sell to the household, they will not impose any tax. So we will solve all the cascading effect and at the same time, the consumer do not see the tax bill. Ma'am, what do I see you nodding as profit speaking? Is this a measure that you would support? You know, I mean, yes, these are some of the measures which I mean from a beginning, it is an economy is well known. So, yes, it is a way forward, but I think though the government should do more, more understand that for the people, example, look at Japan, I am just sharing the housewife cooperative, okay. They all get together, they buy in bulk, they save money there. It is not S3 in today, it is more than 50 years in Japan. Yeah, housewives cooperative same goes to Korea and this kind of movement have had the community because when the government fails to protect, to take care of people's livelihood, people need to take care. The government needs to take care, that means the riot itself, they can't depend. So there had been, they need to have more new new initiative which must be introduced so that the riot can play a bigger role in managing their life because it is very important for people to manage their life. We cannot let just policymakers to manage our life anymore because things are falling apart, it is reality, we can see. COVID have teachers a lot of things during COVID, the National Conference of Conference Center have seen different kind of issues, everyone wanted to refund because they don't have money, they out of job or out of that, refund, refund, refund, even for as 200 or 300, the HHS want their refunds because they need cash to move, to make sure they get Sudh India cause of living. So I believe that the government to intervene at Sudh India, not at Sudh India immediately on cause of living, cause of living cannot be a topic during election, cause of living is always to be there and we need to understand that of course, yes, people are saying that we investment coming in, investment coming in, investment coming in, but we are not, we are not seeing it, thriggling it to the right, especially the wages and the wages are not there, people are suffering especially families, young families, you can see the amount of problem young families are having today, which we have done a small survey, they can't go. Barjaya Bardai, economist at the Malaysian University of Science and Technology and Dr. Marim Muthu, not as an president of FOMCA, let us know if you have questions for them, but also do you feel that the cost of living has in fact gone up, how would you like to see it addressed, call us, send us a voice note or WhatsApp and tweet us as well at BFM radio, it's 637 and you are listening to the big issue with Lynn tonight, we're focused on the cost of living here in Malaysia, with me are Professor Emeritus Dr. Marim Muthu, not as an president of Consumers International and FOMCA, the Federation of Malaysian Consumers Association, if you have a question for either of them, send it our way, but also tell us, do you feel that cost of living has gone up, how would you like to see it addressed, you can call us, double 7, double 3, 2, 900, send us a voice note or WhatsApp, 018, 789, double 8, double 9, tweet us at BFM radio, so early we were talking about SST, another thing that has, of course, famously come up, is the one-off 100-ringet cash handout which kicked in just earlier this week, really, and when this was announced back in July, the PM also said that the government is going to spend a total of 15 billion ringet in cash eight this year, so Marim Muthu, I wanted to start with you on this because earlier you said that this doesn't feel significant particularly for people who are struggling, how helpful are measures like these? If you ask me honestly, it's not worth it because why I'm saying it's not worth it, it's simple, if the government of the day is too honest and they are responsible, your voters are like them and they're supposed to protect the voters or the riot, they need to come out with something more better for those who are suffering especially, if you are targeting the B40 group and the one-off world consumers especially, those who are people with disabilities and those who need special assistance, they need more than other people, so the government can do more better things, we have saw one video going around viral, the Deputy Domestic Trade and Consumer Affairs Minister and said, "Underringet for two people is enough for the whole man, I don't know what kind of economics she has understood, I think it might be a problem, I like her, what can we do underringet today?" So the government should do more, come up with new kind of initiative because we know we are a nation, we are not an agriculture nature, we are depending on everything, we buy everything from outside, fish, you can see vegetables and whatever you say, we are buying from outside, bringing in. So we have no control of prices in this country and the studies have shown worldwide that the price will never come down any more because consumption has gone up and gone up. So the government of the day has to come on with something more solid strategies, the example of telling about the corporate movement, why don't the government think about just using our ideal lines and encourage more people to go to modern farming, I mean such activity is more worthwhile than you just give one underringet and you think that yes, I've done the most for you, that's not the way because you see the people are still going to the next one, what is going to happen to them, one underringet is finished. So I think that the government can do more because for time being what is most important if you look at it today, is that people need to live, you need people to come to vote, if people can't live peacefully, they are not going to perform the duty rightfully. So what the government to do is that it's a social contract, social responsibility, they need to do more and more. How are your thoughts on the Bantuansara 100-ringet handout? Okay. The 100-ringet to me was positive in giving the positive sentiment to the consumer that the government is really concerned, that the government find the means to have every one, even though it is only 100-ringet and actually the retailers are enjoying it, the retailers are enjoying it because suddenly they have an additional 1.5 billion revenue that they collected. But to the consumer, actually 100-ringet is not much on average, every consumer or household in Malaysia spend nearly 1000-ringet on household housing and water and electricity, gas, fuel, and then another 840-ringet on food and another 190-ringet on the wet groceries. And so, all the expenditures are well above 100-ringet, and 100-ringet is one payment is not every month. I think if the government pay 100-ringet per month to all the 3 million before this, that may be meaningful because at least that is going to take care of one portion of their expenses every month. Prof, we have a question from a listener that I think is probably for you. So Ian says, "Is the term cost of living crisis really accurate because the cost of living rises with inflation isn't the real issue that wages have stayed stagnant. If we reframe it as a stagnant wage crisis, wouldn't that shift the focus from government making things cheaper to employers and the wage setting system not keeping up with living costs?" As I mentioned earlier, the wages has increased at the rate of 2.4%, per annum, whereas expenses has increased at the rate of 3.4%, so it's 1% get them. And that gap is a very significant gap because if it happens every year, in 10 years, it will become more than 15% and so how do we close that gap? And of course, everybody always thinks that we have to increase the income of household, how do we increase income of the household, always the easy answer is the employee say, you have to increase your productivity, so then we can pay you higher, but how to increase productivity, and they will say that 70% of our workers' communities are unskilled and they need to be risked, retrained and so on, so that they deserve to get the higher income because they will generate new productivity and so on. But back to expenditure, essentially expenses increase, and we are still importing more than 100 billion of food every year, and that actually means a lot because with the exchange rates, fluctuation, and uncertainty in the international trade, we are at the mercy of the world, political and economic development. We also have a voice note from a listener, which I would like to put to you, Mary Motu, but we'll get to that shortly. Let's hear it first. dan berhenti dari Aaron. Bagus, selamat tinggal dengan kami. Jadi untuk menghantar kesan yang mencari, kesan yang mencari, itu kesan yang mencari. Dan bukan seperti itu, ia berhenti di hari ini, ia berhenti di hari ini. Atau banyak banyak perkara yang mencari kesan yang mencari, dan kita bercakap tentang peluang, peluang, peluang, dan kata-kata di dalam dunia. Dan maksudnya, satu yang sangat ikutnya adalah kata-kata yang kita mempunyai kata-kata yang kita mempunyai The best consumer protection is self-protection, that is what I can tell you, I cannot create any form card, cannot create any magic policies overnight, it is all because we have also been not been consulted in many many issues. So the policy makers are deciding for themselves and without understanding what is happening at the ground, please people from central bank, people all the policy makers go down to see the riot, see what is happening exactly how people are suffering, go to the normal hospital, you see how people are to queue for hours to collect their medicine, to get treatment, time. So you have to go down and see many schools don't have any proper infrastructure, so how are we going to produce healthy and educated citizens in future who can think better, who can contribute to the nation better with that. Thank you so much. Gentlemen, thank you both very much for speaking with us this evening. You just heard from Dr. Murray Muthu-Nadasan, President of Consumers International and Formka and Professor Emeritus Dr. Barjoyai Bardai, Economist and Dean of Postgraduate Studies at the Malaysian University of Science and Technology. This has been The Big Issue, PFM 89.9.