When the government announced a pay rise for all civil servants earlier this year and later suggested a minimum wage of RM1,700, some were thrilled, while others were ecstatic.
The increase has given some people stronger purchasing power, enabling them to meet daily expenses, save for future needs, and even afford some recreation.
However, this has also sparked concerns about the rising cost of goods and services.
Prices of basic commodities have been steadily increasing, undermining the government’s efforts to improve the people’s purchasing power and ensure a decent standard of living. This erosion of purchasing power has also affected private-sector employees.
From restaurants to hawker stalls to kueh sellers, traders have hiked their prices without justification. Even pharmacies have raised their prices across the board, citing vague reasons like increased costs.
To the average citizen, it appears the government has not taken strong measures to curb profiteering by businesses and traders, with lax enforcement by the Domestic Trade and Cost of Living Ministry making matters worse.
To add to this, the government’s plans to remove petrol, education, and health subsidies for those in the so-called T15 category (households earning at least RM13,295) are bewildering.
These individuals currently benefit from subsidies, but under the proposed targeted subsidy scheme announced in Budget 2025, they will lose access.
This policy could have severe effects, especially for those on the borderline of the M40 group transitioning into the poorly defined T15 category.
Take, for instance, a civil servant promoted from a mid-level officer to a higher grade earning RM13,000. Despite working hard to advance, he would now lose the subsidies he previously enjoyed, such as affordable petrol, education, and healthcare, simply because he is classified as “rich.”
This promotion paradoxically leaves him poorer, burdened by higher living costs, making it seem as though he would be better off refusing a promotion.
Such a situation highlights bureaucratic inconsistencies, poor planning, and governance flaws.
The Madani government’s plan to exclude the T15 from subsidies assumes they are in competition with the B40 group for these benefits, but no evidence supports this claim.
The T15 already pay higher income and other taxes. Those in the private sector face similar burdens, including corporate, and other taxes.
Many in the T15 are actually in a transitional zone between the upper M40 and lower T20 groups. They are not wealthy; their income barely covers living expenses, children’s education, healthcare, car and housing loans, and leaves little for emergencies or leisure.
Meanwhile, the true ‘Maha Kaya’ (ultra-rich) at the top of the T20, who make up around three per cent of the population, are unaffected. They can afford top-tier facilities and have little need for government support.
In fact, these ‘Maha Kaya’, through their businesses and corporations, generate jobs and contribute to the economy.
In a capitalist economy, the ultra-rich play a crucial role, investing in trade, manufacturing, healthcare, education, and infrastructure, driving economic growth.
Income disparity is a reality in capitalism, which rewards hard work, diligence, and risk-taking. The wealthy reap rewards through investment and enterprise, unlike ordinary wage earners.
The government’s role is to reduce this inequality using economic measures, such as subsidies, price controls, and market interventions to stabilise costs.
Policies should help those in need without unfairly punishing the T15, who already contribute significantly through taxes. The ultra-rich also play a key role in economic development.
Therefore, targeted subsidies must be well-thought-out, based on sound economic principles, and not be driven by political motives.
What we need is honest, efficient, and compassionate governance to address the needs of all Malaysians, fairly and ethically.
The views expressed here are the personal opinion of the writer’s and do not necessarily represent that of Twentytwo13.
