CHIEF Minister Lim Guan Eng on Feb 21 spoke on the ill effects of the Goods & Services Tax (GST) by citing actual scenarios in which its financial burden is keenly felt by the people as opposed to the drop in prices of goods through GST as previously claimed by Datuk Ahmad Maslan when the latter was Deputy Finance Minister.
Lim was referring to an article which appeared in a Malay language daily on Feb 20 that featured Putra Business School of Universiti Putra Malaysia senior lecturer Dr. Ahmed Razman Abdul Latif who said that prices of goods have gone up from RM100 to at least RM130 over the last seven years.
“This means food priced at RM100 in 2010 has gone up to RM130 in 2017. Many might not feel it because of (a meagre) increase of 3 to 4% each year but the rise in prices is significant during this seven-year period. Other goods also became more expensive and today, lots of people are complaining,” Ahmed Razman was quoted as saying in the article.
Lim also noted that what Singapore Finance Minister Heng Swee Keat announced in his Budget 2018 speech on Feb 19 further reinforced the view that the GST rate will only go up and not down.
“He (Heng) had announced that the GST will increase from the present 7% to 9% sometime in the period between 2021 and 2025. When the GST was first implemented in Singapore, it was only at 3%,” Lim said.
“This confirms the worldwide trend of the GST that once imposed, it only goes up. The sole solution available to prevent the GST from going up is to abolish it. This is what Pakatan Harapan is promising, to abolish the GST within the first 100 days upon taking power (in Putrajaya) and restore the previous Sales & Services Tax (SST). The federal government cannot deny anymore that the GST causes prices to soar and not reduce them,” he added.
The chief minister further mentioned the laments by Ameer Ali Mydin, the managing director of popular hypermarket chain Mydin, when the latter said that hypermarkets and supermarkets in Malaysia which control 50% of the grocery market are seeing negative growth because the people do not have money.
“In the first quarter of last year, the GDP grew by 5.6% but retail sales shrunk by 1.2% and hypermarket sales contracted by 4.8%. That makes you wonder how a country can grow but the growth of hypermarkets which is the real basic consumption in the country, is negative. I think people just don’t have the money,” Ameer said in an interview earlier this month.
“Low-income economies that have implemented the GST have suffered from rising inflation and higher cost of living. Malaysians from middle class downwards are discovering what it is like to be relatively poorer where their real wage growth fails to keep up with either the rate of inflation or the GDP growth rate,” the chief minister added.