Tuesday, October 4, 2022

The GST era

Secara Rawak

Since the Goods and Services Tax (GST) began in force on 1 April 2015 at a rate of 6 percent, the people’s livelihood is getting tough. For the GST to replace the Sales and Services Tax (SST) which was at 10 percent did not bring down goods prices as claimed by Prime Minister Najib in the 2014 Budget speech. Now Najib said that the GST rate will not be increased after the 14thGeneral Election (GE14).

In reality, GST has caused goods and services prices to increase, living costs have become high, and ultimately burdening the people. Referring to the Consumer Price Index (CPI) that measures inflation, the latest data by the Department of Statistics Malaysia (DOSM)[7] shows that the CPI from January to December 2017 recorded an increase of 3.7 percent as compared with the same period in the previous year.

What contributed to the increase of CPI in that period were Transportation (+13.2 percent), Foods & Non-Alcoholic Beverages (+4.0 percent), Health (+2.5 percent), Restaurants & Hotels (+2.5 percent), Housing, Water, Electricity, Gas & Other Fuels (+2.2 percent) and Furnishing, Household Equipement & Routine Household Maintenance (+2.1 percent).

For Foods & Non-Alcoholic Beverages, among the subgroups of Food At Home which showed significant increases during this period were Oils & Fats (+13.3 percent), Fish & Seafood (+6.7 percent), Vegetables (+4.0 percent), Fruits (+3.4 percent) and Meat (+3.1 percent).

Foods and beverages are a major necessity for all the people. The increase of goods index for foods and beverages shows that the goods prices are becoming expensive and the people have to bear a higher cost in order to face such inflation.

Before the beginning of 2018, popular singer Sheila Majid lamented through Twitter on the bad economy that foods were expensive, the ringgit was weak, living cost was high, and there was a shortage of jobs. [8]

However, Secretary General of Treasury, Tan Sri Mohd Irwan Serigar Abdullah responded that the individuals who lamented on the cost of living tend to confuse between cost of living and cost of lifestyle. [9]

Cost of living vs new cost of living

Is the rise of cost living as often mentioned actually a cost of lifestyle? Regarding this issue, we should understand that the current world is not the same as our grandparents’ and parents’ generations. We live in an age of modernisation, urbanisation and a rapid development with modern technology.

Our expenses today are not only on basic necessity goods such as foods, clothing, accommodation and transportation, but we also have to spend on many more goods which might not be necessary in the past but needed now in accordance with the development in line with the technological advancement.

For instance, now everyone can interact, communicate and connect through social media such as Facebook, WhatsApp and Twitter. Almost every individual needs a smart phone and laptop computer to contact others and fulfil their work.

In today’s world with high technology, we cannot avoid from using electronical devices. There is not only the cost for the technological product, but also involving many additional costs such as purchase of Internet quota, maintenance cost, and so on.

Even though there are some who are chasing after brand and wish to buy expensive technological devices, it is the fact that the necessity for some goods today cannot be denied. Just imagine how you are going to work without a smart phone and your colleagues are unable to deal with you through messaging and e-mail?

In order to suit the current societal development, more and more goods become a necessity in our daily lives. It has become a part of our living costs. The living cost would be increased indirectly.

In our opinion, such unavoidable increase of expenses is unsuitable to be considered cost of lifestyle. This cost is not for unnecessary luxury goods but for something which must be owned today. It has actually become a form of manifestation of a new cost of living.

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