By Ye Min (translated name)

The BR1M (1Malaysia People’s Aid) 3.0 for 2014 has been deposited into the accounts of beneficiaries. They can’t wait to check the account balance and withdraw the cash aid. Everyone is happy…. Is this the real situation of the entire scenario? In fact, the middle and lower income group receive RM650 to pay electricity and water bill, food, transportation expenses and others. The money is insufficient to handle inflationary pressure.

Based on data released by the Statistics Bureau, consumer price index increases from 104.9 point to 107.1 point in 2013. The inflation for entire year of 2013 is 2.1%. Comparing it on monthly basis, the inflation in December last year increases to 0.3%. Economists claim that the inflation in December 2013 has created a record high in 25 months. This is mainly due to government starting to implement subsidy rationalisation programme in early September last year. Petrol price and diesel price are adjusted to RM0.20 increase for each litre. This is first round of impact after the implementation of subsidy rationalisation programme.

While this is only the impact of the first round, when price increase for second and third round were to take place, people may face situation whereby their living expenses are higher than their income. For the RM650 that they receive at the beginning of the year, how can the amount be sufficient to counter inflation till the end of the year?

Expert predicts that the inflationary rate for 2014 will continue to climb. This is because the upward adjustment of fuel costs has yet to be fully reflected. Higher transportation cost is expected to push up food prices in short term. Inflation is forecast to reach its peak at 3.8% in August this year.

The disbursement of BR1M has reached its third year. Last year, government disbursed RM3 billion under BR1M2.0. For this year total sum of BR1M3.0 is RM4.5billion. Head of government has announced that the government would continue to disburse BR1M and promise to gradually increase the sum to RM1, 200 within five years. Going by this, the government would have to raise close to RM10billion to cover up the huge hole of BR1M. What people are suspicious of is whether this RM10billion as BR1M is effective? Where is its impact? If this RM10 billion is used as economy recovery package to control prices of goods, counter inflation, increase job opportunities and implement various development plans to benefit the people, then this is a long term, stable plan.

Allocation for people to bank into Employees’ Provident Fund account

Regardless of government’s justification that the release of BR1M is not to fish for votes, the RM650 cash aid, given at the scenario of prices of many goods going upwards, is a political gimmick of offering temporary relief without treating its root problem.

If the government is sincere in solving the pressure of people in life, why not placing the billions of ringgit into people’s EPF accounts such as paying a higher interest rate for EPF? Even if the increase of interest rate is an addition 0.3%, it will still enable more than 13 million EPF contributors to enjoy this benefit. Savings kept in EPF can grow. Contributors can withdraw from EPF to pay housing loans, education fees, and medical expenses or keep their funds till retirement age to ensure they are financially secured in old age. Such measure will be more practical compared to releasing BR1M. This wins more applause.

Government ministers, do you understand the thinking of the people?

(Guang Ming Daily, 26-02-2014)

Original Source: 一马援金的黑洞