As Malaysians, we should all be proud that our beloved country has recorded positive economic growth averaging 6.5 percent since independence in 1957, which is one of the best in Asia. Malaysia’s economy in 2014-2015 was one of the most competitive in Asia, ranking 6th in Asia and 20th in the world.

We are able to attain such success by toiling together as one big family, celebrating our differences, moving forward, and living to the spirit of the tagline ‘Malaysia Truly Asia’. Guided by great leadership, turning our own differences into strength, we are able to overcome various socio-economic challenges, some of which had a potential of destroying our fabric.

Therefore, what we have achieved together since independence is impressive and has much to teach the world, both politically and economically, about how to construct a vibrant multiracial, multi-ethnic, multicultural society and an economic powerhouse. In fact our success model has always been used as an example by various other nations to chart their own national development blueprints.

The looming question, how do we ensure that all our achievement is sustainable?

Of late, we have been inundated by negative news from both political and economic front. The ringgit has dropped to 4.20 to the US dollar while the crude oil price has dipped below the US$45 mark. Its impact to the economy is demonstrated by 3Q gross domestic product (GDP) contraction to 4.9 percent, down from 6.5 percent over the same period last year.

The Consumer Price Index (CPI) for July 2015 increased by 3.3 percent to 113.9 compared with 110.3 in the same month last year.

The government’s continuous justification that the implementation of the Goods and Services Tax (GST) enables more sustainable national growth is being questioned. Needless to say, it is apparent that GST has caused prices of most goods and services to rise, resulting in higher cost-led inflation. In turn, this contracted consumer spending and increased the price of doing business. As it appears, GST in reality spells gloom, at least for now.

All these economic indicators coupled by current political rumble, are definitely not sending a good message to the consumer and investor. While implementation of the GST is expected to help the government collect sustainable revenue, however its success is very much dependent on the strength of domestic consumption and spending.

On the other hand, retail sales are slowing down and this indicated that consumer spending in dwindling. How would the government achieve the targeted tax collection figures?

Undeniably, there is a pressing need to reaffirm and strengthen consumers’ confidence in the domestic economy through active strategic efforts.

During the last budget revision, the prime minister announced positive steps to cut expenditure while introducing measures which will encourage domestic consumption and spending. It is definitely a step in the right direction in particular efforts to stimulate domestic retail and tourism sector while encouraging ‘Buy Malaysian’ products amongst consumers, but more needs to be done.

Tackling current realities

In achieving sustainable growth, our economy has to embrace and tackle the current realities. The Malaysia Consumers Movement therefore recommends that the following steps are implemented:

1. GST amount to be reduced from 6 percent to 3 percent. This, to a large extent, will help cushion impacts of the rising cost of living, encourage spending and boost confidence among consumers as well as businesses.

2. While maintaining delivery efficiency, all public utilities and services provided by government must be exempted from GST.

3. The Royal Malaysian Customs must improve tax collection efficiency at all entry point into the country. This will reduce leakage of tax collection and contribute positively towards government revenue.

4. Re-visit GST impacted items and further expand exempt list to cover wider range of essentials, especially covering items consumed by middle and low income groups. The government must introduce a gradual introduction of GST as opposed to covering everything in a single phase. This will help improve consumers’ confidence and spending.

5. Re-brand the ‘Buy Malaysian Products Campaign’ to encourage consumers to switch to brands produced by local producers as priority. As for large retailers, the current economic situations perhaps offer an opportunity to improve quality levels and better market home brand products.

6. Expand the social security net to support the lower income groups who are most impacted by rising cost of living. While Bantuan Rakyat 1Malaysia (BR1M) is a good start, the government must introduce more sustainable policies rather than a one-off hand-out.

7. With subsidy rationalising efforts under way, the government must introduce concrete steps to ensure efficient and effective government spending and delivery system supported by real austerity measures. This will help improve government revenue to pay for all the above recommendations.

8. Introduce a Retail Advisory Council incorporating all large foreign and local retailers to advise the government on current retail trends, what matters to consumers and identifying measures to mitigate inflation.

We risk negative repercussions if strategic actions are not immediately implemented to cushion its short and long term implications. The government is responsible to ensure the rakyat’s livelihood is not interrupted negatively.

Serve the nation, the time for action is now!

DARSHAN SINGH DHILLON is president, Malaysia Consumers Movement (MCM).