A high-level commission is needed to study and recommend policies to stop the worsening quality of life and standard of living among the lower-middle and working classes, Klang MP Charles Santiago said.
It was good that the government recognised the need to manage rising inflation, as deputy Prime Minister Muhyiddin Yassin said earlier this week, but Charles (left) stressed that inflation was only a small part of the bigger “structural dual crisis” the country faced.
“It needs to be pointed out that Malaysians, especially those in the middle, lower-middle and working classes, are confronted with the dual crisis of (rising) cost of living and increasing debts,” he told a press conference in the Parliament lobby today.
Charles said the bottom 40 percent of Malaysian households, which earned less than RM1,500 a month based on the National Economic Advisory Council’s 2008 figures, were ill-equipped to face escalating costs, especially in the face of the Middle East unrest and the recent quake that struck Japan.
As it stood, he said, there was a clear imbalance in the share of the nation’s economic cake, with the top 10 percent reaping the bulk of the benefits from Malaysia’s 7.2 percent positive growth last year.
The situation has pushed household debt in relation to gross domestic product upwards from 59.1 percent in 2004 to 76.6 percent in 2009, he added.
“Say, for example, our GDP stands at RM1,000. This means that our public borrowing is RM760… that is very high.
“This imbalance (in wealth distribution) has major ramifications on our economy. If it comes to the point that borrowers are unable to pay back (their loans), then our banks are in trouble,” Charles pointed out.
Imbalance threatens entire system
Dzulkefly Ahmad (PAS-Kuala Selangor) agreed that this imbalance would eventually drag the nation’s economy down, and that local consumption was one of the biggest contributors to Malaysia’s GDP.
Dzulkefly (left) said both the government and the rakyat needed to move away from the “reckless practice” of living on debt before it got out of hand.
“It is not only the people who are living on borrowing, the government is, as well. We are imitating the government, and we don’t realise we are strapped in debt,” he said.
Dzulkefly said while Bank Negara had indicated that the rate of non-performing loans in Malaysia “is not bad”, it was worrying to note that more than 83,000 youths – the majority of them aged between 21 and 25 years – have been declared bankrupt due to unmanageable debts.
He cautioned that programmes such as the government’s My First Home scheme, while a positive step in increasing house ownership among the youth, could end up being more of a burden than help in managing the debt profile of Malaysians.
Offering a 100 percent loan to first-time house buyers under the scheme, Dzulkefly said, could create a property bubble where an entire generation is saddled with zero equity stake in their properties, and possibly negative equity, should the bubble burst.
It would therefore be more prudent for the government to first focus on improving real income, especially for the middle and working classes, so they would not have to rely on credit to maintain a reasonable standard of living.
“We are driving our (economic) growth with consumption, so we need to increase disposable income so that we have the capacity to spend,” he added.
அண்மையில் இந்தியர்களின் நீண்டகால பிரச்னைகளில் முக்கிய மூன்று பிரச்னைகள் அதாவது குடியுரிமை பிரச்னை, இந்திய வியாபாரிகள் தொழில் முனைவராகும் பிரச்னை, மற்றும் இந்தியர்களுக்கு தரமான வேலை வாய்ப்பு உருவாக்கும் ஆகிய பிரச்னைகளை தற்போது நாட்டுப் பிரதமர் நாஜிப் தீர்த்து வருகின்றார் என மனிதவள அமைச்சரும் மஇகா தேசியத் துணைத் தலைவருமான டாக்டர் சுப்ரமணியம் கூறியுள்ளார்.
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