Prices Inflation: COLA and Sales Tax

Speech by DAP Secretary-General and Member of Parliament for Bandar Melaka, Mr. Lim Kit Siang, at a Kajang by-election public rally at Reko Road, Kajang Town, on Sunday, 21st Oct. 1973 at 9 p.m.

Prices Inflation: COLA and Sales Tax

Yesterday, the Prime Minister, Tun Abdul Razak, announced a special allowance for government employees drawing $500 and less ranging from $15 to $30.

The payment of $15 to$30 to public sector employees below the $500 salary point is clearly inadequate to help the low and fixed-salaried government workers to cope with rising prices, especially of foodstuffs and basic essentials. Thus, many individual food items have shot up from 50 to over 100%.

The payment of cost-of-living allowance, especially to low-paid employees, should bear more realistically to the steep rise in prices of essential commodities in the last two years, and the DAP calls on the government to double the special allowance so that the payment rises to a maximum of $69 to the lowest salaried groups in the government service.

With the government at last conceding the payment of COLA to the low-income employees, the private sector should not delay any longer, and should pay all their low-salaried employees a reasonable cost-of-living allowance bearing a true relationship to the steep rise in prices of foodstuffs and essential commodities.

Repeal of Sales Tax

The Prime Minister also announced other measures in an attempt to combat rising prices, such as the lifting of some import restrictions and import duties, expansion of food production and the establishment of ‘fair price shops’ and ‘Peoples’ restaurants’.

Reading the government’s anti-inflationary package, one cannot help feeling that the government is still unwilling to come to serious grips with the prices inflation.

Thus, no attempt is made to repeal the highly inflationary Sales Tax. The 1972 Bank Negara Report admitted that the Sales Tax is one of the causes of the steep rise in prices.

If the Alliance government is genuinely sincere in wanting to combat inflation, then it should repeal the Sales Tax altogether. Last year, the Finance Ministry netted some $120 million from the Sales Tax. But the Sales Tax must have been responsible for inflating the prices by three or four times that revenue yields from Sales Tax.

The DAP calls for the repeal of the Sales Tax, and calls on the people of Kajang on November 3 to vote against the Alliance candidate to show their opposition to the highly inflationary Sales Tax and their desire to see the Sales Tax abolished when the Finance Minister presents his 1974 Budget in Parliament in December this year.

Another conspicuous omission is the complete inaction on the part of the government to check unreasonable price increases at the importer and manufacturer’s level, in other words, at source.

Recently, the Finance Minister said that one of the major causes of inflation were the importers who made over 100% profits. But the Finance Minister, being a member of the rich and wealthy in Malaysia, has taken no concrete action to stop anti-social profiteering by manufactures and importers.

Finally, the Prime Minister has given an assurance that the price of sugar will be maintained at the present level. But there is no mention of flour’s price. Does this indicate that the price of flour will go up, probably after Hari Raya festive season?