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LETTER | Check price hikes before they spiral out of control

LETTER | The prices of construction materials are skyrocketing and the government needs to take note of this as the construction industry is a very wide-ranging business sector and its spillover effects will be seen if the hike in prices is not maintained at reasonable levels.

The hardware business, which, like many other industries, was affected by the lockdown and movement control orders, is now eager to recoup its losses.

If other commercial entities, too, jumped on the bandwagon, then the prices of a wide array of goods and services will spike. In turn, consumers will be affected greatly due to the socio-economic hardship brought about by the pandemic as workers suffered job losses, reduced pay, and closure of businesses.

One can understand why old stocks have new increased prices. One of the major issues in the post-pandemic period is coping with the urge of businesses to recoup their losses, and this can cause inflation and other problems.

Unlike the hardware business and some others, workers and employees cannot recoup their losses in wages, salaries, overtime earnings, and bonuses.

Therefore, all businesses should show some restraint and not engage in exploitative price spirals that will compound the difficulties of the people.

Offering incentives

The government needs to conduct more surveys on a weekly basis to monitor price increases and take appropriate action through enforcement and other measures.

The government's assistance schemes have partly addressed the needs of the citizens and the people in the B40 and M40 groups.

However, they will be greatly affected by price hikes. The government can help the business sector to lower prices by offering some incentives and addressing the problems faced by specific industries.

The government can import more agricultural produce to overcome the shortage of supplies brought about by various reasons.

The government can also ease the shortage of foreign workers to overcome under-production in some sectors heavily dependent on these workers such as the SMEs and plantations. It can also provide licence fee waivers, reduction in assessment rates, and other reductions for the short term for small businesses.

Spillover effect

The government needs to compile a list of industries that are causing these short-term price increases and target them through better enforcement, incentives, and assistance schemes.

This targeting of specific industries and sectors can play a major role in controlling prices. It is no point taking general action.

Some industries do not contribute to price increases as they deal with non-essentials or are focused on exports.

Generally, the multinationals and big commercial operators do not raise prices wantonly as they would have to get government permission.

However, it is mainly the countless SMEs and micro-businesses that will quickly raise prices at their whims and fancies and give all kinds of excuses for the exorbitant increases.

This will have a domino and spillover effect which is difficult to stop once it gains momentum. The government's assistance schemes are helpful but price controls will have an even more beneficial effect for the consumers.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

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