Cuts that bleed the poor

By G Vinod and Ken Vin Lek
FMT FOCUS PETALING JAYA: The poor will have to spend a third of their income on essential goods if the government reduces subsidies on them, as proposed by the Performance Management and Delivery Unit (Pemandu) of the Prime Minister’s Department.
An FMT survey among Petaling Jaya residents found that the poor currently spend about 29.7 percent of their income on rice, sugar, cooking oil and other essential items. In contrast, high-income earners use up only 3.5 percent of their earnings on these essentials.
With the proposed subsidy cuts, the percentage will rise to 33.6 percent for the poor and 3.97 percent for the rich.
FMT’s findings on public reaction to the proposed cuts are vastly different from Pemandu’s reported findings. Eighty-two percent of respondents to FMT’s random survey opposed the cuts. Pemandu’s parallel figure was 39 percent.
Wan, a security officer employed at a local commercial building, said his family would suffer.
“I have three children to feed,” he said. “I earn about RM1,100 a month and I already find it hard to make ends meet.”
However, he seemed resigned to facing harder times, saying the government had the “might to impose its will” on the people.
“If the government really cares for the people, it should fix prices for essential goods.”
Mohan, a taxi driver, said he was not too anxious for himself but agreed that the cuts would make the poor poorer.
“I don't really feel it will affect my monthly expenses much as I earn a daily income,” he said. “However, I believe it will strain the pockets of common people.”
He said unscrupulous businessmen would make matters worse. “I notice that a lot of restaurants love to hike up food prices, citing petrol price increases, etcetera, but I don't see the connection.”
Priorities wrong
Peanut vendor Letchumy, 57, said the government should never consider cutting subsidies on essentials, especially food.
“Never increase food prices,” she said. “The government can go ahead and increase the prices of cigarettes and liquor as those things are hazardous, but everyone needs to eat.
“I earn less than RM500 a month, and subsidy cuts will strain my purse.”
Businessman Choo Kay Weng questioned the wisdom of removing or cutting subsidies, saying the government had its priorities wrong.
“The government should first improve its financial management skills,” he said.
“Any move to remove subsidies will affect my household expenses as well as my business. I am involved in landscaping, and I will have to spend more on transportation and labour costs. Surely I will then need to increase my prices.”