Malaysia’s year-end holiday spending: Do the removal of subsidies and higher goods prices make people more thrifty?
The ringgit's poor performance is also one of the factors for many who shop and travel during this time of year to rethink their expenditure.
By QISHIN TARIQ
An abundance of holiday cheer, traffic jams and packed shopping malls. That is the Christmas and New Year season in Malaysia in a nutshell.
However, the government's plan to cut subsidies in stages while hiking the service tax rate to 8 per cent, as part of economic reforms, seems to have put a damper on things.
And then, of course, there is the ringgit's poor performance; all of which is causing many who shop and travel during this time of year to rethink their expenditure.
Elaine Sue Ann, a brand manager at a multinational corporation, for one, says that while some of her colleagues talk about going to Europe or Japan on holiday, she is wary of overspending.
"I'm newly married. So, my husband and I are trying to make more prudent financial choices.
We originally planned to go to Japan for a big honeymoon, but after seeing how everything is going, we decided to holiday in Taiwan instead," she said.
Elaine shares that she has also decided to cook and hold Christmas dinner at home this year; a departure from her tradition of treating her family to a lavish meal outside.
"Christmas is a big thing for me. I host a fancy meal to thank my family and share my love for them. But with the cost of goods rising, I've been learning from TikTok videos how to cook my own Christmas dinner and roast," she said.
Cutting back on various expenditure
Datuk K. Koris Atan, president of the Penang Consumer Protection Association, concurs that the habit of eating out has become increasingly untenable for many, especially at the rate inflation is outpacing starting salaries.
But the bigger concern is that some young people are continuing to spend a lot, and find themselves in debt.
"Seeing what others are doing and where they holiday can make you have itchy fingers to spend too, even when you can't afford it," he said.
The problem, however, is that cutting back and being prudent with spending does not benefit everyone.
In fact, Malaysian Federation of Hawkers and Petty Traders Association president Datuk Seri Rosli Sulaiman says that many small traders are feeling the pinch, on account of the public's austerity measures. And even year-end sales and discounts have not succeeded in luring as many shoppers as in previous years.
Rosli explains that restaurants and grocers are still getting customers as before, mainly because these businesses are seen as necessities. However, tailors and niche services like hobby stores have been hard hit, as people think twice about spending.
"Even with year-end bonuses coming in, many are thinking of paying down their debts or saving in case the economy doesn't improve next year," he said.
For the record, the World Bank has revised its forecast in regard to Malaysia's economic growth from 4.3 per cent to 3.9 per cent, with economists warning that high household debt could cause domestic spending to dip further.
School pressure in the new year
Incidentally, it is not just holiday shoppers and traders who are feeling the pressure. Parents, too, are struggling to cope, no thanks to the school year looming, and new uniforms and textbooks needing to be purchased.
To be clear, the start of the Malaysian school year was pushed from January to March following the COVID-19 pandemic. Hence, parents are able to put off the traditional back-to-school shopping spree temporarily.
Nevertheless, many families are concerned about the rise in costs, and how the removal of subsidies will affect them.
Explains Zainoddin Ramelan, chairperson of Permuafakatan Ibu Bapa Prihatin Sentul, the government has introduced several measures to help parents and students cope, such as the supplementary food programme (RMT) for primary schools and Kuala Lumpur's MySchoolBus initiative.
However, these efforts are mainly targeted at the B40 economic group, meaning that M40 parents must still shoulder their kids' expenses on their own.
Melaka Action Group for Parents in Education chairperson Mak Chee Kin notes, in any event, that while education is essential and that parents should avoid attempting to stinge on necessities like exercise books and stationery, they could cut down on buying new clothes and reuse where possible.
He also hopes schools will not insist on compulsory co-curricular uniforms or grand graduation ceremonies, which burden families.
How much all of that will impact overall spending, however, is left to be seen.
Do you have a story tip? Email: malaysia.newsroom@yahooinc.com.
You can also follow us on Facebook, TikTok and Twitter. Also check out our Southeast Asia, Food, and Gaming channels on YouTube.
