During a forum on Budget 2018 earlier this week, Najib said that tolls should be abolished, adding that wherever possible he would look into unraveling the legacy problems caused by toll concession agreements.
Malaysians shouldn’t fall the empty promises of the Prime Minister whose track record has proven that he has zero commitment in abolishing these tolls.
It isn’t the first time Dato’ Seri Najib Razak promised to abolish tolls or lower toll rates. In Barisan Nasional’s manifesto for the 13th General Election, Najib promised the gradual reduction of intracity tolls within 5 years. Yet, 5 years on, not only has this promise failed to be delivered, he delivered the exact opposite.
In October 2015, 18 tolls operated by 11 concessionaires were allowed to increase their fares with some even going up RM2.30 overnight. These included toll routes such as the LDP, SMART Tunnel, MEX, AKLEH and NPE in the Klang Valley as well as the Senai-Desaru Highway in Johor and the Butterworth Outer Ring Road (BORR) in Penang.
In response to this, Najib turned around and said the the government had no choice but to allow the toll fares to increase because preventing it would require massive compensation payments. The Prime Minister went on to threaten Malaysians that taxes would have to be increased if the government were to abolish tolls.
The Prime Minister’s threats have proven true because when the government did remove certain tolls, they paid exhorbitant compensation equivalent to the amount of toll these concessionaires would have collected anyway!
When the Batu Tiga, Sg Rasau, Bukit Kayu Hitam and Eastern Dispersal Link (EDL) tolls were removed last year, the government will be paying RM2.2 billion for the first 3 tolls. For the EDL, the government will reportedly be paying a yearly compensation of RM70 million.
The above means, Najib “abolish tolls” or not, the BN government would always profit the concessionaires. Malaysians would either have to pay for the tolls directly, or pay for them via taxes paid to the Government.
Most hypocritically, the Prime Minister had only recent on 3rd December criticised Pakatan Harapan’s plan to eliminate highway tolls and reintroduce petrol subsidies will increase air pollution in the country. So did Najib temporarily change his mind to fish for votes in the impending General Election, just as he did in 2013?
Pakatan Harapan believes in the rule of law and the sanctity of the contract signed between the Government and the toll concessionaires. The provisions of the contracts allow for the Government to expropriate or buy back the concessions at cost, subject to a minimum return for the concessionaires for the past years of operations.
Barring exceptions, the agreements do not at any point in time require the Government to compensate these concessionaires for future profits. Why is the BN Government so adamant in ensuring these toll concessionaires are paid their future profits at the expense of Malaysian tax-payers?
All this is proof that Najib’s ‘promise’ to abolish tolls is just another empty promise by a Prime Minister and government desperate to hold on to power. Malaysians should not fall for these empty promises and should not forget the government’s own inability to deliver on the same pledge that it had made 5 years ago.
Showing posts with label Cost of living. Show all posts
Showing posts with label Cost of living. Show all posts
Saturday, February 24, 2018
Friday, February 09, 2018
Rahman Dahlan’s dismissive attitude towards Malaysian’s inability to afford even daily groceries shows his blatant disregard for the issues of the average Malaysian.
Earlier this week, Mydin owner Datuk Ameer Ali Mydin had said that though the Goverment’s published GDP figures showed strong growth, consumers seemed to be spending less and less on grocery shopping. He suggested that Malaysians just did not seem to have the same amount of money to spend as before, even though the economy has been growing.
Mydin’s comments quickly drew responses from members of the Government, including Minister in the Prime Minister’s Department Dato’ Seri Abdul Rahman Dahlan who was quick to defend the Government’s economic measures. He said that hypermarket sales only made up 8% of total retail sales, which had seen overall growth both in terms of volume and value. He further added that Malaysians did indeed have more money to spend as highlighted by increases in domestic tourist expenditures as well as tourist spending abroad.
Dato’ Seri Rahman Dahlan’s dismissive attitude towards Mydin’s claim shows just how out of touch the BN Government is from the daily struggles faced by average Malaysians. If even low-priced hypermarkets like Mydin are facing weakened consumer demand, where does the Minister expect Malaysians to be buying their everyday groceries? Does he think Malaysians are going abroad to do their groceries?
Last November, 5 Giant hypermarkets were shuttered by owners GCH Retail (Malaysia).The 2017 Malaysia Retail Industry Report, also noted that consumers were less likely to spend money in the past year owing to the increasing cost of living. The same report noted that hypermarket sales in general had shrunk 3.1% in the first 3 quarters of 2017.
Accordingly, Malaysian consumers were found to be more frugal and judicious with their spending opting to make smaller purchases at different stores to make the most out of the various discount and offers provided by different stores.
All the above information is consistent with the Government’s own statistics. Inflation last year was the highest we’ve seen in years, averaging 3.7%. In particular, food and non-alcoholic beverages saw an increase of 4% over the past year. Regardless of whether someone is shopping in a hypermarket or a pasar tani, these price increases are present everywhere.
The Government should not be flaunting the spending statistics of Malaysians who can afford to travel abroad as proof that all Malaysians are better. Worse, they should not be dismissing the very real and loud complains of average Malaysians who struggle to even afford their daily groceries.
If the BN Government has no sympathy or empathy for the ordinary men on the street, it is time for them to get the boot. Malaysians deserves a government that looks out for the interest of all Malaysians and does not dismiss the real issues being faced everyday.
Mydin’s comments quickly drew responses from members of the Government, including Minister in the Prime Minister’s Department Dato’ Seri Abdul Rahman Dahlan who was quick to defend the Government’s economic measures. He said that hypermarket sales only made up 8% of total retail sales, which had seen overall growth both in terms of volume and value. He further added that Malaysians did indeed have more money to spend as highlighted by increases in domestic tourist expenditures as well as tourist spending abroad.
Dato’ Seri Rahman Dahlan’s dismissive attitude towards Mydin’s claim shows just how out of touch the BN Government is from the daily struggles faced by average Malaysians. If even low-priced hypermarkets like Mydin are facing weakened consumer demand, where does the Minister expect Malaysians to be buying their everyday groceries? Does he think Malaysians are going abroad to do their groceries?
Last November, 5 Giant hypermarkets were shuttered by owners GCH Retail (Malaysia).The 2017 Malaysia Retail Industry Report, also noted that consumers were less likely to spend money in the past year owing to the increasing cost of living. The same report noted that hypermarket sales in general had shrunk 3.1% in the first 3 quarters of 2017.
Accordingly, Malaysian consumers were found to be more frugal and judicious with their spending opting to make smaller purchases at different stores to make the most out of the various discount and offers provided by different stores.
All the above information is consistent with the Government’s own statistics. Inflation last year was the highest we’ve seen in years, averaging 3.7%. In particular, food and non-alcoholic beverages saw an increase of 4% over the past year. Regardless of whether someone is shopping in a hypermarket or a pasar tani, these price increases are present everywhere.
The Government should not be flaunting the spending statistics of Malaysians who can afford to travel abroad as proof that all Malaysians are better. Worse, they should not be dismissing the very real and loud complains of average Malaysians who struggle to even afford their daily groceries.
If the BN Government has no sympathy or empathy for the ordinary men on the street, it is time for them to get the boot. Malaysians deserves a government that looks out for the interest of all Malaysians and does not dismiss the real issues being faced everyday.
Thursday, March 23, 2017
Malaysians are massively dissappointed that the Government has sided to protect the profits of oil and gas companies, at the expense of the man-on-the-street
Malaysians are hugely disappointed that the Government has made a complete U-turn on the previously announced proposal for fuel retailers to compete freely at prices below a government-set ceiling price.
"After joint discussions with oil companies, we have agreed to announce the weekly price of petrol and diesel every Wednesday and the price (for the first week under the new system) will be effective March 30," the Minister of Domestic Trade, Cooperatives and Consumerism (KPDNKK) said in a live announcement on RTM1.
Datuk Hamzah Zainuddin said any companies that wished to sell below the weekly ceiling price must seek approval from his ministry. "Petrol dealers that wish to hold promotions and provide discounts on the set price can do so by first seeking approval from KPDNKK.
"All oil companies and petrol dealers are reminded to abide by the new pricing. Stern action will be taken against dealers that sell petrol or diesel at prices other than what is set by the government," he said.
This announcement reversed the earlier announcement by the Second Finance Minister, Dato’ Seri Johari Abdul Ghani and Datuk Hamzah himself.
Bernama has reported on 16 March that the Second Finance Minister, Dato’ Seri Johari Abdul Ghani has said that “although the ceiling price was determined by the government, it was up to the oil companies to sell the petrol and diesel below it”.
This was further to the announcement made by the Minister of Domestic Trade, Cooperatives and Consumerism, Datuk Hamzah Zainuddin on 4 March.
The first sign of a U-turn was when I received a parliamentary reply from the Minister of Finance earlier this week who said that “with regards to the proposal to fix ceiling prices for petroleum products, it is still in the study and evaluation stage which will directly involve several relevant agencies such as the Ministry of Finance and the Minstry of Domestic Trade, Cooperatives and Consumerism”.
The sequence of events clearly showed that the Government came under pressure from the oil companies who protested against the policy which allowed them to compete freely.
Although the Minister will claim that on paper, those companies who were interested to sell at a lower price or hold promotions will still be able to do so after obtaining “approval” from KPDNKK, this process will be cumbersome and any applications will be subjected to protests from other oil companies.
Why should these oil companies remain ‘protected’ by the Government when petrol and diesel are no longer subsidised by the tax-payers? What makes these oil and gas companies so special that the deserve special protection compared to other goods and services?
I had previously issued a statement in support of the ‘free competition below ceiling price’ policy because the ultimate beneficiaries of the policy will be the man-on-the-street who are burdened with high fuel prices and that of other essential goods and services. Competition will allow more efficient petrol companies to offer lower prices to consumers.
The biggest winners to the Government’s policy now are Petronas, Shell, BHP, Petron and Caltex – as they effectively form a cartel to control petrol prices via a Government’s fixed price.
Such a policy will contradict the spirit and intent of the Competition Act which forbids price-fixing and monopolistic practices in nearly all of the other industries. Even trade associations such as the Coffee Shop Association have been told that “fixing” coffee or tea prices – which have been their practice for decades – is now illegal under the Act.
We call upon the Government to prioritise the interest of the rakyat who are burdened with increasing prices of essential goods and services, and not that of big corporates like oil and gas companies.
"After joint discussions with oil companies, we have agreed to announce the weekly price of petrol and diesel every Wednesday and the price (for the first week under the new system) will be effective March 30," the Minister of Domestic Trade, Cooperatives and Consumerism (KPDNKK) said in a live announcement on RTM1.
Datuk Hamzah Zainuddin said any companies that wished to sell below the weekly ceiling price must seek approval from his ministry. "Petrol dealers that wish to hold promotions and provide discounts on the set price can do so by first seeking approval from KPDNKK.
"All oil companies and petrol dealers are reminded to abide by the new pricing. Stern action will be taken against dealers that sell petrol or diesel at prices other than what is set by the government," he said.
This announcement reversed the earlier announcement by the Second Finance Minister, Dato’ Seri Johari Abdul Ghani and Datuk Hamzah himself.
Bernama has reported on 16 March that the Second Finance Minister, Dato’ Seri Johari Abdul Ghani has said that “although the ceiling price was determined by the government, it was up to the oil companies to sell the petrol and diesel below it”.
This was further to the announcement made by the Minister of Domestic Trade, Cooperatives and Consumerism, Datuk Hamzah Zainuddin on 4 March.
The first sign of a U-turn was when I received a parliamentary reply from the Minister of Finance earlier this week who said that “with regards to the proposal to fix ceiling prices for petroleum products, it is still in the study and evaluation stage which will directly involve several relevant agencies such as the Ministry of Finance and the Minstry of Domestic Trade, Cooperatives and Consumerism”.
The sequence of events clearly showed that the Government came under pressure from the oil companies who protested against the policy which allowed them to compete freely.
Although the Minister will claim that on paper, those companies who were interested to sell at a lower price or hold promotions will still be able to do so after obtaining “approval” from KPDNKK, this process will be cumbersome and any applications will be subjected to protests from other oil companies.
Why should these oil companies remain ‘protected’ by the Government when petrol and diesel are no longer subsidised by the tax-payers? What makes these oil and gas companies so special that the deserve special protection compared to other goods and services?
I had previously issued a statement in support of the ‘free competition below ceiling price’ policy because the ultimate beneficiaries of the policy will be the man-on-the-street who are burdened with high fuel prices and that of other essential goods and services. Competition will allow more efficient petrol companies to offer lower prices to consumers.
The biggest winners to the Government’s policy now are Petronas, Shell, BHP, Petron and Caltex – as they effectively form a cartel to control petrol prices via a Government’s fixed price.
Such a policy will contradict the spirit and intent of the Competition Act which forbids price-fixing and monopolistic practices in nearly all of the other industries. Even trade associations such as the Coffee Shop Association have been told that “fixing” coffee or tea prices – which have been their practice for decades – is now illegal under the Act.
We call upon the Government to prioritise the interest of the rakyat who are burdened with increasing prices of essential goods and services, and not that of big corporates like oil and gas companies.
Thursday, March 16, 2017
Don't “thank” the Domestic Trade Minister for raising sugar prices by “only 11 sen” - facts proved that the BN Government has allowed Malaysia’s sugar duopoly to make super-profits over the past 2 years
Two days ago, Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Hamzah Zainuddin said Malaysians should be thankful for the minimal hike in sugar price. He said the hike, at only 3.8%, was minor compared with what was proposed.
This followed the ministry’s recent announcement that the new price of coarse granulated white sugar from March 1 onwards was RM2.95 per kg, up from the previous RM2.84.
“In fact, when we did the calculation, the millers had been asking us to increase the price to RM3.20, which is a jump of 40 sen. But from our calculation, we took the average and set it at the minimum of 11 sen,” he told reporters at the Dewan Rakyat.
“Malaysians should thank me instead of being angry with me,” Hamzah said.
An arrogant statement like that by the Minister is an open invitation for a fact-check. In keeping with the current fad of “fact-checks” as epitomised by Malaysia Communications and Multimedia Commission’s (MCMC) “Sebenarnya” portal, I dug up the historical prices of global raw sugar prices, Malaysia government’s “Long-Term Contracts” (LTC) for raw sugar supply, our historical subsidies for processed white sugar and the Manufacturer’s white sugar price (before subsidy). (Please refer to table attached.)
Prior to 2015, Malaysia’s two sole sugar manufacturers purchased raw sugar via Malaysia government’s LTC for imported raw sugar supply. For 2009-2011, the fixed raw sugar price was US$17.50 per 100lbs, while for 2012-2014, the price per 100lbs was US$26.00.
The LTC raw sugar purchasing system was subsequently abolished and manufacturers purchased import their raw sugar supply directly based on global market raw sugar prices.
I have also calculated the Manufacturer’s white sugar price, which is the sum of retail white sugar price plus any subsidy paid by the Government. This will be the price that the two manufacturers receive per kilogram of sugar sold.
Very simply, I put the manufacturer’s raw sugar purchasing price and the processed sugar selling price historical trends from 2010 to date together in a single chart as shown in Chart A below.
The Chart itself speaks a thousand words.
Between January 2012 to December 2014, the manufacturer’s raw sugar supply price was US$26 per 100lbs. They could sell processed sugar at RM2.84/kg and had no problems making a profit.
The question that needs to be asked is, today, the global market raw sugar price is approximately US$18.16 per 100lbs, why is it that the BN government see it fit to further increase the retail sugar price to RM2.95/kg?
Even after accounting for the differences in exchange rate over the period of time, the price of sugar should have been reduced, and not increased!
Chart A:
Worse, if you look at the raw sugar supply price in 2015, it dipped for the manufacturers immediately from US$26 in December 2014 to US$15.06 in January 2015, and further to a low of only US$10.67 in August 2015, why did the Government allow the manufacturers to continue making astronomical profits at RM2.84/kg?
Why hadn’t the Government reduced the price of sugar drastically in 2015 when the raw sugar supply price hit rock bottom? As a comparison, even when the manufacturers bought raw sugar for US$17.50 prior between 2009 and 2011, the manufacturer’s sugar price was only between RM2.05 and RM2.50.
The data proved beyond doubt that there is absolutely no need for Malaysians to “thank” the Domestic Trade Minister as demanded by Dato’ Seri Hamzah Zainuddin. Instead, Malaysians should perhaps be cursing and swearing at the Minister and the BN Government for stupidly (or perhaps intentionally) allowing the two Malaysian sugar manufacturers for profiteering via a Government-imposed selling price at the expense of ordinary suffering Malaysians.
We call upon the Government to not only withdraw the recent price hike of 11 sen for the retail price of sugar, but instead further lower the ceiling price from RM2.84/kg to reflect the substantially lower global price of raw sugar over the past 2 years. This should be done immediately without any compensation or subsidies paid to the manufacturers.
This followed the ministry’s recent announcement that the new price of coarse granulated white sugar from March 1 onwards was RM2.95 per kg, up from the previous RM2.84.
“In fact, when we did the calculation, the millers had been asking us to increase the price to RM3.20, which is a jump of 40 sen. But from our calculation, we took the average and set it at the minimum of 11 sen,” he told reporters at the Dewan Rakyat.
“Malaysians should thank me instead of being angry with me,” Hamzah said.
An arrogant statement like that by the Minister is an open invitation for a fact-check. In keeping with the current fad of “fact-checks” as epitomised by Malaysia Communications and Multimedia Commission’s (MCMC) “Sebenarnya” portal, I dug up the historical prices of global raw sugar prices, Malaysia government’s “Long-Term Contracts” (LTC) for raw sugar supply, our historical subsidies for processed white sugar and the Manufacturer’s white sugar price (before subsidy). (Please refer to table attached.)
Prior to 2015, Malaysia’s two sole sugar manufacturers purchased raw sugar via Malaysia government’s LTC for imported raw sugar supply. For 2009-2011, the fixed raw sugar price was US$17.50 per 100lbs, while for 2012-2014, the price per 100lbs was US$26.00.
The LTC raw sugar purchasing system was subsequently abolished and manufacturers purchased import their raw sugar supply directly based on global market raw sugar prices.
I have also calculated the Manufacturer’s white sugar price, which is the sum of retail white sugar price plus any subsidy paid by the Government. This will be the price that the two manufacturers receive per kilogram of sugar sold.
Very simply, I put the manufacturer’s raw sugar purchasing price and the processed sugar selling price historical trends from 2010 to date together in a single chart as shown in Chart A below.
The Chart itself speaks a thousand words.
Between January 2012 to December 2014, the manufacturer’s raw sugar supply price was US$26 per 100lbs. They could sell processed sugar at RM2.84/kg and had no problems making a profit.
The question that needs to be asked is, today, the global market raw sugar price is approximately US$18.16 per 100lbs, why is it that the BN government see it fit to further increase the retail sugar price to RM2.95/kg?
Even after accounting for the differences in exchange rate over the period of time, the price of sugar should have been reduced, and not increased!
Chart A:
Worse, if you look at the raw sugar supply price in 2015, it dipped for the manufacturers immediately from US$26 in December 2014 to US$15.06 in January 2015, and further to a low of only US$10.67 in August 2015, why did the Government allow the manufacturers to continue making astronomical profits at RM2.84/kg?
Why hadn’t the Government reduced the price of sugar drastically in 2015 when the raw sugar supply price hit rock bottom? As a comparison, even when the manufacturers bought raw sugar for US$17.50 prior between 2009 and 2011, the manufacturer’s sugar price was only between RM2.05 and RM2.50.
The data proved beyond doubt that there is absolutely no need for Malaysians to “thank” the Domestic Trade Minister as demanded by Dato’ Seri Hamzah Zainuddin. Instead, Malaysians should perhaps be cursing and swearing at the Minister and the BN Government for stupidly (or perhaps intentionally) allowing the two Malaysian sugar manufacturers for profiteering via a Government-imposed selling price at the expense of ordinary suffering Malaysians.
We call upon the Government to not only withdraw the recent price hike of 11 sen for the retail price of sugar, but instead further lower the ceiling price from RM2.84/kg to reflect the substantially lower global price of raw sugar over the past 2 years. This should be done immediately without any compensation or subsidies paid to the manufacturers.
Sunday, February 12, 2017
Move to allow petrol companies and kiosks to compete will benefit consumers and is long overdue
Bernama reported last week that the Second Finance Minister, Dato’ Seri Johari Abdul Ghani said the government is studying the option of setting a ceiling price for petrol in view of the escalating cost of fuel.
He added that "It is up to the government to set a ceiling which is deemed fair for all. When the government has decided on the ceiling price, whether they (O&G industry players) want to sell the oil at lower prices for promotional purposes, we leave it to them.”
We fully welcome the above move as it is long overdue. Malaysians do not understand why petrol companies in Malaysia are not allowed to sell petrol prices at lower prices when they could see how kiosks in Thailand or Singapore can compete and lower pump prices.
When I asked the above question in Parliament several times, the only response I had once in 2009 from the then Deputy Minister of Domestic Trade and Industry, Datuk Tan Lian Hoe was that allowing petrol stations to compete with different prices “would confuse consumers”. It appears that Malaysians consumers are much more easily confused compared to our overseas counterparts.
We can understand if the Government sets a maximum price these companies can sell petrol so that Malaysians will not be unfairly over-charged. But we don't see the logic of not allowing the companies to compete and transfer their cost efficiencies to us via lower fuel prices. This is especially since the Government has already abolished fuel subsidy more than a year ago.
The only reason we could think of was that the Government is merely trying to protect the weaker players at the expense of the consumers.
As publicly discussed over the past weeks over the fuel price hikes, the petrol price is calculated based on the average monthly price of refined fuel as measured by Means of Platt Singapore (MOPS). However, petrol companies don't purchase their fuel at these “average” prices. They will all try, with varying degrees of success to acquire their supply of petrol at the lowest possible price during the month or even the year.
In addition, some petrol companies are obviously more efficient than others and have lower operating and investment costs.
Therefore, why shouldn't these companies who purchase their stock at cheaper prices and are more cost-efficient be allowed to pass on some of their savings to long-suffering Malaysians?
Hence we call upon Dato' Seri Johari Abdul Ghani to free up the competition as soon as possible and not wait until petrol prices go up further in the coming months.
In fact, under the new regime, the competition between petrol companies and kiosks must be regulated under the Competition Act by the Competition Commission of Malaysia. This is to ensure that there will be a level playing field and the petrol companies and kiosks will not collude to fix prices at the expense of ordinary consumers.
He added that "It is up to the government to set a ceiling which is deemed fair for all. When the government has decided on the ceiling price, whether they (O&G industry players) want to sell the oil at lower prices for promotional purposes, we leave it to them.”
We fully welcome the above move as it is long overdue. Malaysians do not understand why petrol companies in Malaysia are not allowed to sell petrol prices at lower prices when they could see how kiosks in Thailand or Singapore can compete and lower pump prices.
When I asked the above question in Parliament several times, the only response I had once in 2009 from the then Deputy Minister of Domestic Trade and Industry, Datuk Tan Lian Hoe was that allowing petrol stations to compete with different prices “would confuse consumers”. It appears that Malaysians consumers are much more easily confused compared to our overseas counterparts.
We can understand if the Government sets a maximum price these companies can sell petrol so that Malaysians will not be unfairly over-charged. But we don't see the logic of not allowing the companies to compete and transfer their cost efficiencies to us via lower fuel prices. This is especially since the Government has already abolished fuel subsidy more than a year ago.
The only reason we could think of was that the Government is merely trying to protect the weaker players at the expense of the consumers.
As publicly discussed over the past weeks over the fuel price hikes, the petrol price is calculated based on the average monthly price of refined fuel as measured by Means of Platt Singapore (MOPS). However, petrol companies don't purchase their fuel at these “average” prices. They will all try, with varying degrees of success to acquire their supply of petrol at the lowest possible price during the month or even the year.
In addition, some petrol companies are obviously more efficient than others and have lower operating and investment costs.
Therefore, why shouldn't these companies who purchase their stock at cheaper prices and are more cost-efficient be allowed to pass on some of their savings to long-suffering Malaysians?
Hence we call upon Dato' Seri Johari Abdul Ghani to free up the competition as soon as possible and not wait until petrol prices go up further in the coming months.
In fact, under the new regime, the competition between petrol companies and kiosks must be regulated under the Competition Act by the Competition Commission of Malaysia. This is to ensure that there will be a level playing field and the petrol companies and kiosks will not collude to fix prices at the expense of ordinary consumers.
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