PETALING JAYA: For many Malaysians who are financially affected by the Covid-19 outbreak, the six-month moratorium on loan repayments and income tax refunds could not have come any sooner.They see this as a timely financial boost to help them get through each day and make ends meet.Such is the case for E. Shaevitharoopan, a 31-year-old e-hailing driver who has temporarily taken a break from his job due to reduced customers and fear of contracting the virus from passengers, which could put his family of four at risk.
The family now relies solely on his wife’s salary as an office manager. With car and housing loans to be paid and two children to feed, this is almost impossible.“We barely have enough money. Which is why I have decided to temporarily postpone my car loan repayment, which amounts to RM550 per month.“We are just reserving whatever money we have to buy food for the family,” he told theSun yesterday.
LETTER | For the new government, the issue of cost of living faced by the rakyat should be a critical priority. Consumers are suffering. Incomes are low.
The living wage as proposed by Bank Negara is RM2,600 for a single adult, RM4,500 for a couple with no children and RM6,500 for a couple with two children. Yet, six million workers or 50 percent of workers in Malaysia earn less than RM2,160.Many Malaysians, especially in urban areas, feel their income is insufficient to raise their living standards. As of 2018, nearly 30 percent of Malaysians felt that they did not have enough money for food and 23 percent reported they did not have adequate money for shelter. According to Bank Negara, the cost of living has been increasing across all households but more significantly for lower-income households in urbanised states. Generally, the higher cost of living was driven by higher prices for food and housing.
The lower-income household spend more on food and housing which costs more in urbanised areas. The bottom 20 percent spend 65 percent of their household expenditure on food and housing while the bottom 40 percent spend 58 percent of their household expenditure on food and housing.Expenditure on transportation is also significant. So, for the bottom 20 percent, food, housing and transportation, accounts for 75 percent of household expenditure while for the bottom 40 percent, these three components account for 70 percent of household expenditure. Thus, to address the concerns of stagnant incomes and increasing costs of living, the government needs to address the issues of food prices, house prices and the cost of transportation.
DATE OF RELEASE: 18 MAY 2020
Covid -19 pandemic has indeed created a huge challenge to all of us in every aspect of our lives including socially and economically. The government has come out with some plans to assist the people. Unfortunately not all affected people seem to benefit from the Prihatin Economic Stimulus Package and the Prihatin SME Economic Stimulus Package
Bank Negara Malaysia (BNM) has declared a 6 months moratorium for all borrowers from housing loans and car loans to as well as fixed rate Islamic financing. Inevitably, the Minister of Finance had to coax the Banks to defer the compound interest to be accrued to the principal. At the time when people are struggling to make ends meet, banks should be more compassionate instead focusing just on into profit making. The Movement Control Order (MCO) which was implemented on 18 March has been extended till 9th June 2020. Some places have been placed under Enhanced Movement Control Order (EMCO).
Throughout this ordeal of MCO and EMCO, more than one million people have lost their jobs and many others also had to take no pay leave or reduced pay. Financial constraints have caused severe family tribulations. This was proven when MCO was lifted to Conditional Movement Control Order (CMCO) many people rushed to pawn shops. The queues at the pawn shops throughout the nation were very long. Many people were there to pawn their jewelleries or to renew their items pawned. Pawn shops are known as the poor men’s bank as many customers are from the lower income bracket (B40) and some from the middle income bracket (M40). Many throng to these shops as they faced financial constraints during this challenging time. It clearly shows that the government aid is relatively insufficient to make ends meet. To rub salt into the wound, some pawn brokers went on to charge on their customer interests despite the fact that the Minister of Housing and Local Government had declared that Pawn Brokers have deferred the interest during the MCO, from March 18 to May 12.
The movement control order (MCO) has been extended. There also appears no indication that the government would be extending further financial support to low and middle income families. During this current MCO as well as with the extension of the order, more workers will be losing jobs, those working will have their incomes reduced; and all workers and those seeking employment will be very worried of their future as jobs disappear and the economic outlook seems to be increasingly bleak.
Yet households have to continue to meet their financial obligations. One of their current major obligations is their communication and utility bills. For certain as families spend an increasing amount of time at home, their utility and communication bills are expected to increase substantially. This would include the electricity bills, water bills, handphone and internet bills, and astro bills.
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