KUALA LUMPUR (Politics Now! Malaysia Chronicle) – On 29 Nov 2023, the MCA Economic and SME Affairs Committee conducted crucial discussions on domestic economic affairs, imminent challenges, and the committee’s strategic outlook. The upcoming year is expected to test Malaysia’s economic resilience, notably with the impending targeted subsidies programme covering essential commodities such as cooking oil, diesel, and RON95 petrol. However, the government has yet to provide clear implementation details.
The Committee stressed that subsidy cuts would impact not only the T20 group but also extend into the M40 bracket. The anticipated decrease in consumer spending might prompt adjustments in habits, causing a ripple effect on consumption patterns and consequently affecting business and economic activities.
Chairman Datuk IR Lawrence Low cautioned, “This could potentially spark another round of inflation, causing domestic economic strains, particularly impacting prices of goods and services in the T20 and M40 segments. This surge could result from insufficient supply or declining demand, impacting overall price levels.”
“While the Ministry of Economy asserts the diversification of our economic structure to mitigate the impact of inflation, this argument seems weak. This policy directly influences residents’ cost of living, regardless of economic structural diversity. We must not overlook the fundamental principles of economics.”
The Committee examined Agriculture and Food Security Minister Datuk Seri Mohamad Sabu’s “reverse investment” proposal for foreign livestock feed production to address local shortages. Low suggested prioritising domestic improvements due to abundant idle land. He emphasised the need to consider the costs of foreign investments against domestic enhancements.
In addressing prevailing economic challenges, Low stressed the structural nature of the issues at hand, advocating for GST to enhance tax efficiency. He emphasised GST’s transparency and efficiency over SST, noting that the country’s revenue decline is a consequence of tax evasion. “In this scenario, raising SST might incite inflation, a more prudent choice is the implementation of a standardized, transparent, and fair GST.”
Deputy Chairman Dato’ Wong Tat Chee also highlighted the crucial role of political stability in fostering economic growth and the challenges in execution processes.
The Committee outlined future directions, including those of overseas activities and discussions which will also center around how Malaysia can capitalise on the China Plus One initiative to secure substantial benefits.
To foster inclusivity, the Committee plans groundbreaking activities like a nationwide “National Economic Forum” among individuals from different cultural and community backgrounds. “We aim to create an inclusive platform for diverse opinions, contributing to discussions on the nation’s economic development.”
The Committee will continue to actively engage with government agencies, non-governmental organisations, and the business community to gain deep insights into current economic policy issues and challenges. On the same day, they promptly discussed these matters with Sdr Ding Hong Sing, the President of the SME Association of Malaysia, and other representatives for an in-depth understanding. – Released by MCA Economic and SME Affairs Committee
POLITICS NOW! MALAYSIA CHRONICLE