We have been shared with the latest news of revision of service tax from current 5% to 6% effectively 1st January 2011. The revised service tax is to ensure that the government will earn an extra income and further reduce the deficit. The implementation of revision is to temporarily 'calm the emotion' of the public of the implementation of GST of which pending for approval in Parliament.
The government also has announced the revision of retail price for RON95, RON97, flour, and LPG. All revision has take into effect on 4/12/2010 from 12 midnight, except RON97 was increased couple of days ago.
In any business nowadays, we will need transportation to deliver goods, services as well as products to consumers/customers. A mamak will get his supply of flour from retailer/wholesaler/supermarket. Definitely he will need to drive or at least get someone to buy the stock on his behalf.
The cost of transportation also will be borne by retailer/supermarket/wholesaler from the supplier/factory. What is the transportation cost here? We are talking about the price hike of petrol/diesel, a commodity used by the transporter to power up their prime mover/trucks to deliver the goods to the consumer (mamak, supermarket, retailer, wholesaler).
In this case, the transportation cost are being passed from one end to another end and the last effect is, the rakyat will pay the cost, i.e. an increase price of roti canai.
An increase of consumer goods will defitely impacted our inflation rate escalating, eventhough this is not the primary cause to the increase. The consumer price index for Oct 2010 114.7 an increase of 2% from 2009. An increase of CPI resulted to less buying power of the consumer as they need to fock-up extra 2% of their disposible income to spend their income on goods and services as compared to goods and services pricing in 2005.
The concerns on property bubble in Klang Valley has raised the concerns of BNM to increase OPR to 2.75% to curb the issue of property speculation. Most of the speculators are buying the middle and high end property for the purpose of rental or disposal at a later date. Speculation activity impacted the low and middle income group as they buying power has diminished as cost of living increased.
As a consumer/rakyat, it is time for us to reprioritise our expenditure and to make adjustments to suit with challenging economy landscape nowadays.
