Government’s RM100 cash gift for the people

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Instead of bragging how the cash handout will benefit four million families, the PM should instead apologise that four million households need help.

Congratulations are in order for voters who had voted for the UMNO-led Barisan Nasional in the recent Melaka and Johor state elections. In appreciation to both Barisan Nasional supporters (especially UMNO supporters) and non-supporters, Prime Minister Ismail Sabri has prepared a magnificent gift – RM100 cash aid for B40 households and RM50 for single individuals.

The government said the cash handouts will benefit an estimated 8.6 million people and four million households. B40 refers to bottom-40 of Malaysian household income earning less than RM4,850 per month. The B40 category is the lowest income classification in the country. For a family to earn less than US$1,100 per month is quite deplorable. And Malaysia has four million of them.

As of 2020, there were about 8.2 households in Malaysia. This means half of them belong to the B40 category. Yet, the ruling government – comprising primarily the United Malays National Organization (UMNO), Malaysian United Indigenous Party (Bersatu) and Pan-Malaysian Islamic Party (PAS) – appears quite proud when it announced the cash handout.

Turtle-egg PM Sabri should be shameful that after 65 years under UMNO government (with the exception of the 22 months rule under Pakatan Harapan government) since independence in 1957, the people are still struggling to put food on the table. Instead of bragging how the cash handout will benefit four million families, the premier should instead apologise that four million households need help.

However, the cash handout comes with many strings attached. The RM100 is being given as compensation for the scrapping of the cooking oil subsidy (except 1-kg polybags) effective July 1. Finance Minister Tengku Zafrul said the government is currently subsidising about RM6 per kg for cooking oil. The current price is about RM8.50 per kg, which means the new price would be RM14.50 per kg.

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In addition, the government has also decided to remove ceiling prices for chicken and eggs effective July 1. Chicken price is expected to go up to RM12 per kg from the current ceiling price of RM8.90 per kg, according to Domestic Trade and Consumers Affairs Minister Alexander Nanta Linggi. But the price could go higher since it will be freely floated and without subsidy.

The backdoor and unelected government of Ismail Sabri has also thrown in a special bonus for the people – electricity tariff hike. Depending on usage, people will see between 6.5% and 7.1% higher in their monthly bills. The government cries and whines that an increase in electricity tariff is inevitable as the cost of generating electricity has increased sharply.

Blaming the Ukraine war, the government said coal prices have skyrocketed, despite the fact that the country’s only electric utility company – Tenaga Nasional Berhad’s (TNB) net profit – skyrocketed to RM3.66 billion for the financial year ended Dec 31, 2021. Why can’t the GLC (government-linked company) do national service to help the people?

The burning question is whether the RM100 cash is enough to cover the inevitable price increases as a result of cooking oil, chicken and eggs subsidy cancellation and electricity tariff hike. Without subsidy, a bottle of 2kg cooking oil will jump to RM29 (from RM17), while 3kg will shoot to RM43.50 (from RM25.50) and 5kg (to RM72.50 from current RM42.50).

With new cooking oil prices going up by 70%, do you think food prices will remain the same? For individuals who do not cook and will only get RM50 cash aid from the so-called caring government, even an increase of RM0.50 per meal will cost them an extra RM45 a month already (three meals for 30 days). And you can bet restaurants will charge more than 50 sen after July 1.

Even if you cook at home everyday, you would need to pay between RM12 and RM30 (2kg and 5kg cooking oil) more per month just on cooking oil alone. But cooking at home also means consuming more cooking gas or electricity or both. And guess what, the government has brilliantly cornered you with the electricity tariff hike. A cylinder of cooking gas, costing RM30, probably last a month with constant cooking.

Unless people boycott chicken and eggs, the removal of the ceiling price for the primary source of protein will definitely contribute to inflation. On average, each Malaysian consumes 50kg of chicken per year – that’s RM100 more the people need to pay if chicken prices escalate from RM8.90 to RM12 per kg. And we have not even calculated the higher price of eggs.

People whose current electricity bill is RM100, for example, will need to pay RM7 more every month (or RM84 per year) based on the new electricity tariff hike. In general, the cost of living will increase by more than RM100 every month with the government’s latest plan to reduce subsidies. Therefore, the RM100 cash aid is insufficient to help a household for a month, let alone a year.

Prime Minister Ismail Sabri talked as if the RM100 cash handout is a big deal. Common sense says when the corrupt and incompetent government gives you RM100, they were already planning to take away at least 10 times more from your pocket. It does not make sense that the value of subsidies to be removed is the same as the government cash aid.

There’s no point giving away RM100 if the subsidies abolishment could only save the government the same amount of money. If it’s true, the government might as well do nothing at all. So, the only reason why the clueless government gives every household one-time RM100 cash – or a total RM630 million – is because it could save more than RM630 million from subsidies for the people.

The saving from government subsidies will be about RM720 million (chicken ceiling) and RM240 million (cooking oil). Hence, the total savings – RM960 million – is already more than the one-time RM630 million cash for the people. In other words, the people are actually paying more – RM360 million to subsidise the corrupt government instead. But the spill-over effect of inflation is even more.

As a palm oil producer, why can’t the government slap windfall tax on the palm oil sector to offset the cooking oil subsidy? As calculated by the genius former Prime Minister Najib Razak, the government could collect at least RM1.5 billion in windfall tax from palm oil. Likewise, why can’t the government impose windfall tax on TNB’s RM3.66 billion net profit to offset electricity tariff?

Najib has even recommended raising the price of RON95 petrol by RM0.20 per litre in order to help the government save RM3 billion in subsidy (or rather earn RM3 billion from the people). Of course, the serial liar deliberately hides the fact that the global high oil price also means the government earns more from Petronas, the national oil company, in both taxes and special dividends.

Lecturing PM Sabri, he said the government can actually accumulate savings from subsidies of chicken, cooking oil, petrol and windfall tax to pay higher cash handouts of more than RM500 for each household (obviously to make voters happy before the upcoming general election). Here’s the problem – Najib has ignored the multiplier chain-reactions of raising the price of petrol.

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For example, when you raise RON95 by RM0.20 a litre, everyone will raise prices – from manufacturers, transportation, suppliers and whatnot. Eventually, the cost of raw materials and goods will balloon over the supply-chains and passed down to customers. Essentially, the more subsidies you cut during the current skyrocketing inflation, the higher the cost of living it will get.

Elite politicians like Prime Minister Ismail Sabri, who wears a RM5,500 Burberry shirt and expensive Audemars Piguet Royal Oak Offshore Chronograph 44MM Blue Cameo designer watch worth a whopping RM292,553, can never understand the problem of inflation. Likewise, crooked billionaire Najib has no idea of the effects of high petrol prices or new taxes like GST.

Hilariously, the clueless and incompetent Sabri government has resorted to blaming smugglers as one of the reasons to discontinue subsidy for cooking oil. Doesn’t the country have something called the Royal Malaysian Police, Custom Department and Malaysian Armed Forces? Why are the authorities still not doing their jobs after decades of whining, moaning and bitching about smuggling?

A real aid is like Singapore’s latest S$1.5 billion (RM4.7 billion) support package to help 1.5 million Singaporeans whose annual income is not more than S$34,000 (RM107,700), where each recipient will receive S$300 (RM950) cash. All Singaporean households will also receive S$100 (RM316) utilities credit to help offset their bills. The cash is given without any evil condition to cut subsidies or raise electricity tariff. – Finance Twitter