BR1M, public transport too facile in Budget 2016, consumer groups say

Prime Minister Datuk Seri Najib Razak tables the 2016 budget at Parliament in Kuala Lumpur, October 23, 2015. — Picture by Yusof Mat Isa
Prime Minister Datuk Seri Najib Razak tables the 2016 budget at Parliament in Kuala Lumpur, October 23, 2015. — Picture by Yusof Mat Isa

KUALA LUMPUR, Oct 23 — Consumer groups expressed frustration today over the lack of attention in Budget 2016 on substantive aspects of issues like public transport and a comprehensive social safety net.

Federation of Malaysian Consumers Association chief executive Datuk Paul Selvaraj criticised the government’s continued reliance on cash aid policies, after Putrajaya announced a RM50 increase of 1 Malaysia People’s Aid (BR1M) in the government budget tabled today.

““As a one-off handout, people would surely want it, but if we look at the people who are really disadvantaged, it is better to provide opportunities instead,” he told Malay Mail Online.

“It is very common for countries with GST to give handouts to help people counter the increase in prices, as a contra to the tax. But that is all. There needs to be a comprehensive social safety net,” he added.

Prime Minister Datuk Seri Najib Razak announced today in the tabling of Budget 2016 that BR1M assistance would be raised to RM1,000 for households with a monthly income of RM3,000 and below, and RM800 for households earning between RM3,001 and RM4,000 monthly.

Paul also criticised the focus of Budget 2016 on infrastructure in the issue of public transport, rather than on service.

“The LRT is good, but the bus systems are bad, and that is the main public transport people would depend on. If the service is not focussed on, people would still rather buy their own cars, which are more expensive,” he added.

Paul said that while consumers would be welcoming the doubling of medicines included in the Goods and Services Tax (GST) zero-rated list, FOMCA would continue to push for all medicines to be included.

Consumers Association of Penang (CAP) president S.M. Mohamed Idris also said BR1M would better serve its purpose in helping lower-income groups as food or transportation vouchers, rather than as cash handouts.

He added that he was disappointed that taxes on the rich were only increased from 25 per cent to 26 per cent for those earning between RM600,000 to RM1 million, and from 25 per cent to 28 per cent for those earning more than RM1 million, saying it did not help in narrowing the gap between the rich and poor.

“We don’t think the government has done enough for the income gap. It should have progressively increased percentages for income brackets above RM1 million to reach 30 to 40 per cent taxation,” he said when contacted.

“For us, income disparity is a core issue. They could even increase GST for luxury items,” he added.

However, Malaysian Consumers Association (MACONAS) secretary-general Datuk Amarjit Singh Gill pointed out that despite the shortcomings on core issues, the Budget had addressed many consumer complaints over GST.

“We as consumer bodies have been asking for the GST to be removed from prepaid telco charges, and removing it from basic products like milk for babies, and that’s what the government has also done,” he said.

“This will definitely be welcomed by the lower and middle class. Even more medicines have been zero-rated. But again, like the last Budget, we will have to see the complete list to scrutinise.”

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