KUALA LUMPUR -- The Pakatan Harapan (PH) government has made quite an achievement within 100 days of its formation and despite the financial constraints, issues affecting the rakyat's cost of living have been seriously dealt with.
Some quarters have expressed satisfaction over the efforts made, pointing out that, among others, the June inflation rate showed a significant decline from a year ago.
RHB Research Institute Sdn Bhd Economic Research Head, Peck Boon Soon, said it was too early to judge if the cost of living had been really cut down within the first 100 days of PH taking office but based on June's Consumer Price Index (CPI) data, the inflation rate had been significantly lowered to 0.8 per cent from 3.6 per cent recorded in the same month last year.
"Obviously, the CPI was lower owing to the zero-rated Goods and Services Tax (GST) as well as the freeze on RON95 and diesel prices.
"Therefore, based on the inflation rate (as measured by the CPI reading), yes, we can say that the cost of living of the people has been reduced," he told Bernama.
Many expect the Sales and Services Tax (SST), to be reinstated on Sept 1, will result in rising prices of goods.
Asked if reintroducing the SST ran counter to the PH election pledge of tackling the ballooning cost of living, Peck said he believed prices would stabilise in the long run, although an upward adjustment might be seen in the short term.
"Previously, under the GST regime, businesses reckoned that they could not receive the tax refund immediately. Some of them might have priced in the six per cent into their selling prices and hence jacked up the inflation rate.
"With the SST coming into play, I believe this situation is not likely to happen as businesses will be more disciplined in terms of passing on the cost to the consumers. This will indirectly help in reducing the burden and cost of living of the people," he said.
Apart from that, Peck said news that Fitch Ratings had affirmed Malaysia's long-term foreign-currency issuer default rating at 'A-' with a stable outlook would also boost investors' confidence in the country and help to lift the ringgit versus the US dollar.
"It will help reduce imported inflation, which is one of the major factors contributing to the higher prices, so I believe the cost of living will be more stable as we move forward," he said.
Peck said investors generally were quite receptive and comfortable with what the new government had done so far, judging from the equity market and the ringgit which had been holding up quite well, although it was affected by the fall of the Turkish lira lately.
On Friday, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) closed at 1,783.47 while the ringgit was traded at 4.1050/1080 against the greenback.
Asked if the government would be able to deliver all 10 promises even after the first 100 days in office, Peck reckoned it had to first resolve the financial constraint involving the RM1 trillion government debt.
"If the financial situation allows them to do so, they will be able to fulfill all the promises," he said.
Overall, he remained upbeat that the people were quite satisfied with what PH had announced and implemented during the 100 days, although some had expressed concern over the announcement of the third national car project.
"If the government is not getting involved in the national car 3.0 project, and no special preferential treatment in the form of tax protection was given, which Proton enjoyed previously and made it less competitive, I think there is no harm for us to have another national car," he added.
Meanwhile, the National Chamber of Commerce and Industry of Malaysia (NCCIM) lauded the PH coalition for honouring some major election pledges.
In a statement earlier this week, NCCIM said the government had been quick in making good on several high-profile manifesto promises such as abolishing the GST and stabilising petrol prices, which were aimed at reducing the cost of living.
It said the government also restructured various government agencies such as the Malaysian Anti-Corruption Commission, Election Commission and Judicial Appointments Commission so that they now reported directly to Parliament, thus ensuring greater independence, transparency and democratic oversight.
"While there is still much to be done, the early commitments towards a more business-friendly environment, as well as greater accountability and transparency, are encouraging signs.
"Let's not forget, Rome wasn't built in a day," the chamber added.
The 10 promises pledged by PH under its 100-day manifesto are:
1. To abolish GST and take steps to reduce cost of living
2. To stabilise the price of petrol and introduce targeted petrol subsidies
3. To eliminate unnecessary debts that were forced on FELDA settlers
4. To introduce the Employees Provident Fund scheme for housewives
5. To standardise the monthly minimum wages of employees across the whole country
6. To ease the burden of National Higher Education Fund Corporation (PTPTN) loan borrowers
7. To set up Royal Commissions of Inquiry into scandal-ridden institutions
8. To restore Sabah and Sarawak's autonomous rights, as enshrined in the Malaysia Agreement 1963
9. To introduce health scheme "Skim Peduli Sihat"
10. To review all mega projects
As of today, several promises have been fulfilled, namely abolishing GST, stabilising fuel prices, removing PTPTN defaulters from the travel blacklist, reviewing mega projects including the Kuala Lumpur–Singapore High-Speed Rail and the East Coast Rail Link, as well as introducing the first phase of the pension scheme for housewives starting Aug 15, 2018. - Bernama
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