CAP  Applauds National Budget 2025: Calls for Strengthened Local Economy, Wage Reforms, and Accountability

The Consumers Association of Penang (CAP) welcomes the measures outlined in the National Budget 2025, which aim to consolidate an economy weakened by decades of dependence on imports, flawed agricultural policies, corruption, and poor programme implementation. The underlying policy to help the needy and tax the rich is laudable.

The budget allocation for operating expenses is RM335 billion, and RM86 billion for development expenditure. The government must closely monitor to ensure that the funds allocated for various projects and programmes are spent efficiently to achieve their targets Previous Auditor-General reports have uncovered questionable expenditures and leakages, which, if prevented, could have enhanced the intended impact of these projects. Rigorous oversight is essential to ensure that funds are used effectively and transparently.

The budget provision to increase the minimum wages of workers from RM1,500 to RM1,700 is long overdue. It must be the first step towards a living wage for workers which, in the cities now, is around RM2,700. The workers are currently paid low wages, which constitute only 32.4% of the company income, far below the global average of 40% and the Madani Economy framework target of 45% in 10 years. This imbalance disproportionately affects low- and semi-skilled workers, whose salaries are not keeping pace with inflation.

The current minimum wage of RM1,500 is inadequate, particularly after mandatory deductions for the Employees Provident Fund (EPF) and Social Security Organization (Socso), and does not keep up with inflation. The proposed increase is a necessary step to ensure workers’ livelihoods.

One positive aspect is the decision not to impose sales tax on basic food items, while premium imported goods such as salmon and avocados will be taxed. This is a prudent step to reduce the outflow of the ringgit and encourage the consumption of local produce which would strengthen the domestic economy. However, this policy must be supported by concerted efforts to boost agricultural output and food production through various funds and incentives.

The RM27 million allocation to incentivize farmers and livestock breeders to increase the production of beef cattle, goats, sheep, and onions should contribute to our food security and autonomy. RM27 million has been allocated to the Malaysia Competition Commission (MyCC) to eliminate cartels in the agricultural sector. The cartel control of food production and distribution must be eliminated to ensure affordable price of food for the people.

The Budget also announced allocations for the implementation of 48 People’s Residency Programmes (PRR) and 14 Affordable Housing projects. While these housing projects are important, the government must ensure that residents pay their maintenance fees, as many PRR projects suffer from poor upkeep due to unpaid maintenance fees. The residents must be made to take ownership of the projects and responsible for their cleanliness and social activities. State and federal lands should be developed to provide affordable housing and not privatised for so-called mixed development which, in substance, is largely high-end housing for the wealthy. The Ministry of Housing should set up a Housing Board to develop federal and state lands to provide housing for the low-income groups.

The allocation of RM45.3 billion, if productively utilised, should help to relieve the pressure on our public hospitals and improve their services. The imposition of a charge on the wealthy seeking treatment in public hospitals is justified.

The focus of health care should be on preventing sickness and not merely curative. The phased increase in excise duty on sugary drinks, starting at 40 cents per litre on 1 January 2025, is a positive step towards promoting healthier lifestyles. CAP urges vendors to offer discounts for sugar-free drinks to encourage consumers to make healthier choices. Given the current pricing structure, where coffee with milk costs more than black coffee, drinks without sugar should also see a price reduction. Majority of Type 2 Diabetes is caused by sugar intake and is preventable through dietary measures.

The Ministry of Education has been allocated the whopping sum of RM64.1 billion. It must be used to improve the quality of education and the morals and ethics of the future generation. The teachers must be properly trained to instil good values in children. Rote learning must give way to creative thinking. The breakdown of discipline and gangsterism among students must be addressed and rectified. There must be close cooperation between parents and school to ensure students benefit from their education and become useful and responsible citizens.

The two price formula for Ron 95 is problematic and open to abuse. CAP has been calling for petrol subsidies to be removed and assist the lower income group with cash payment. That will simplify the system for providing financial assistance to targeted needy individuals.

Mohideen Abdul Kader
President
Consumers Association of Penang (CAP)

Letter to the Editor, 24 October 2024