Friday, May 27, 2011

Comparing costs and charges.

Today the government finds it necessary to rationalize the prices of many consumer items to reduce the amount of susidies it has to pay to keep the price stable. Even as it is people are unhappy about the rise in the cost of petrol, sugar,chicken and many types of foodstuff sold at the restaurants and eateries. Not only has the price of certain local 'kueh' (cakes) gone up, the size of the kueh like 'buah Melaka', 'putu piring', 'pulut panggang' etc. had shrunk so much. Even the 'roti canai' has shrunk in size like a cheap hankerchief after it has been washed.

People are very unhappy about this of course. There is no control at all over certain accepted standards in the size of kueh such as those mentioned above, the size of the chicken, fish or beef cuts in the curry, or even in the amount of rice or mee goreng dished out in one order. I often found that they vary from shop to shop, ironically offering a bit too much when I'm not too hungry and very little when I'm famished.

Even charges for electricity, water , rents, tolls etc have gone up. The increse is even steeper when the supply and services had been privatized.

In explaining to the people why such increase in price is necessary, the government often resorts to making comparison with what people in other countries have to pay for the same commodity or services. For instance the cost per liter of petrol is compared with the cost in US, UK, the Philippines, Indonesia, Thailand etc. When the cost per liter here is comparatively quite low, the increase in price is therefore considered justifiable. The same is done for justifying an increase in toll charges where the ringgit or its equivalent for each kilometer of travel is found to be comparatively lower than what is paid by people in other countries. Other increases in price are also justified in the same way.

It must be noted that such comparison is not always valid. In the case of toll charges, for example, one must consider the total charges which must be paid for a trip between two or more popular destinations in a country. How much does an American pay in toll charges for a trip from LA to Pittsburg, for example, as compared to what we must pay for a trip say between JB and Penang. If the toll charges for the latter is more than for the former which contains more mileage, then our charges can be considered as high. You just have to pay more in toll charges than the Americans because there are longer stretches of toll-free roads in the US than in Malaysia.

One must consider the total amount to be paid in relation to the cost of other consumerr items. If you have to pay more than a hundred ringgit in toll charges for a trip by car from Penang to JB or vice versa remember that that could be more than the cost of ten or more meals for one person. That woul not be so in countries where the cos bof living is much higher. Thus the cost of living index must be taken into cosideration in fixing charges, fines etc.. If the index is twice as high then the charges imposed can be twice as heavy for the public to bear. The same goes for the price of petrol and othrr consumer items. When we compare how much we have to pay for certain consumer item or service in this country with others remember that the value of the money to us is different from ithe value of an eqivalent amount in a different country. When the police charges RM300 for a traffic offence, remember thst the amount could feed a poor family for maybe half to one month. An electric bill for RM400 has the same implication. Remember that the poor in the country must psy the cost for any consumer item as much the rich and we don't have food coupons or special discounts for the poor. The poorer Malaysians will suffer from any price increase as a result of removing a subsidy more than the richer Malaysian, in the same way that the payment of a heavier charges or fine on any servive or offence will punish them more than others.


kaykuala said...

Akhi Norzah,
I've no quarrels with the rise in food price and essential items. It's only fodder for the 'blind' politicians with their hidden agenda. The point is you have a choice. If you don't like the price rise of chickens or sugar, then substitute or not to buy. You have a choice.
What I can't stomach were the traffic fines. You couldn't do much but to pay the RM300. No discounts as the notification came 1 year later.You faithfully went at the normal 110km but the notification said you exceeded the 90km limit. You are punished for the sins of the speed fiends who fly past at 170km. My heart bleeds like many others who have to part with thousands of hard-earned income.

P/S You're very incisive in all your postings, particularly this one which drew on precise observations.

norzah said...

Thanks for the after-thought which struct my fore-attention, Bro. You certainly are a first class citizen if when the price of certain consumer items goes up you just find sn alternative or don't buy the items anymore. I would want to know why the price goes up and why the govt doesn't.control it since i have the right to enjoy those items as much as the rich people. I'd protest if the govt allows the not-so-rich people be deprived of consuming those items. As for the increase in fines for traffic offences, imagine what would happen if everytime a person who can only afford a secondhand motorcycle must pay rm300 everytime he unintentionally breaks a traffic rule. To the rich rm300 means nothing and they can break ss many rules as they like. The rules will ultimately become just a joke to the filthy rich.