Latest news with #Fomca
The Star
3 days ago
- Business
- The Star
Fomca lauds new 'B40-friendly' electricity tariffs
KUALA LUMPUR: The Federation of Malaysian Consumers Associations (Fomca) has expressed full support for the implementation of the new electricity tariff structure under Regulatory Period 4 (RP4). The new tariffs will take effect from July 1, 2025, to Dec 31, 2027, under the Incentive-Based Regulation (IBR) framework. Describing it as timely, progressive and beneficial for Malaysian households, Fomca chief executive officer Dr T. Saravanan said the new tariffs reflects a fairer and more transparent energy pricing system. "This initiative comes at a crucial time when many households are facing financial pressures due to inflation and the rising cost of living," he said. Saravanan said the revised tariff structure reduces the average base tariff from 45.62 sen/kWh to 45.40 sen/kWh, contributing to an estimated 19% reduction in total average electricity costs compared to the previous regulatory period. Although the rate cut may appear marginal, he said it is supported by structural reforms that provide greater protection to domestic consumers, particularly those in the B40 and M40 income groups. Saravanan said the introduction of the "Energy Efficiency Incentive" allows households that consume 1,000 kWh or less per month to avoid any tariff increase, thereby rewarding energy-efficient users and encouraging responsible consumption. "The updated structure also includes a more detailed billing system, with breakdowns of energy generation, network usage, capacity charges, and retail costs. "This level of transparency empowers consumers to understand their bills better and provides clarity on how costs are derived," he said. The expanded "Time of Use" scheme now includes weekends and off-peak weekday hours from 10pm to 2pm the next day, enabling consumers to enjoy further savings by shifting high-usage activities to these periods. Fomca also welcomed continued protection for vulnerable groups, including a RM40 monthly rebate for hardcore poor households under the e-Kasih programme, and dedicated tariffs for the agriculture, water, sanitation, and rail sectors. A 10% rebate for educational institutions, places of worship, and registered welfare homes will also remain in place. Saravanan said the replacement of the Imbalance Cost Pass-Through mechanism with the new Automatic Fuel Adjustment system would enhance price responsiveness to global fuel and currency movements. He however stressed the need for clear communication on any resulting price changes. He urged the Domestic Trade and Cost of Living Ministry to step up enforcement against unjustified price hikes in essential goods that may be triggered by the tariff adjustment. "Fomca will continue to monitor the implementation closely and advocate for ongoing consumer engagement, education and regulatory enforcement to maximise the impact of this policy reform," he said. The Energy Commission on Friday (June 20) announced that starting July 1, 2025, over 23.6 million domestic users in Peninsular Malaysia will benefit from fairer and more progressive electricity rates under the newly approved tariff schedule for Regulatory Period 4 (2025-2027). This includes changes to the average base tariff rate, the tariff structure and the fuel cost adjustment mechanism, implemented under the Incentive-Based Regulation framework. – Bernama
The Star
16-06-2025
- Business
- The Star
Govt should expand food aid programmes, says Fomca
Grow your food: Urban farming and community agriculture can help lower a household's food cost. PETALING JAYA: The findings on food inflation over the decades by the Statistics Department (DOSM) is a call to action for reforms, says the Federation of Malaysian Consumers Associations (Fomca). 'Either we reform now, or we risk deepening inequality, worsening malnutrition, and undermining Malaysia's economic and social resilience,' said secretary-general Saravanan Thambirajah. He was commenting on the department's report that found a threefold increase in food prices in the past five decades. 'We must ensure every Malaysian has affordable access to nutritious, safe, and culturally appropriate food, regardless of income level or geography. 'For that, consumer empowerment must be matched by bold policy shifts, inclusive fiscal planning, and sustained political will. Only then can we build a resilient, just, and food-secure Malaysia for the next generation.' Saravanan said the B40 and M40 segments are using multiple coping strategies which are not sustainable in the long term. They include borrowing money or using Buy Now, Pay Later (BNPL) option to afford groceries and switching to lower quality food such as instant noodles and ultra-processed goods. 'Some families have been skipping meals or reducing portion sizes, while others have been working longer hours or taking multiple jobs to compensate for rising costs. 'Families have also been reducing spending on healthcare, education and other essentials to pay for food. These trade-offs affect long-term health, education outcomes and social stability.' To tackle this, Saravanan said the government should expand food assistance programmes such as Sumbangan Tunai Rahmah (STR), Food Bank Malaysia and targeted food vouchers, especially for urban poor households. 'There must also be price ceilings and buffer stock for critical items like rice, cooking oil, eggs and chicken to protect consumers from sudden price spikes. 'Regulate middlemen and enforce fair pricing in wet markets and retail outlets through more frequent monitoring by the Domestic Trade and Cost of Living Ministry,' he said. He said school-based nutrition programmes must be revised and subsidised healthy meals must be given to schoolchildren to relieve household food burdens and address malnutrition. He said the urban farming and community agriculture, which empower families to grow their own vegetables with the support of local councils and state governments, must be encouraged. Saravanan said Fomca urged that Malaysia's fiscal priorities be aligned with food sovereignty and resilience. 'The country must move from a dependency model to a self-reliant and climate-adaptive food system. 'That means prioritising substantial infrastructure investment in irrigation, food storage and logistics. Land zoning protections to prevent loss of farmland to housing and industry,' he said. Saravanan said there must be budget allocation for research, subsidies for local producers, and price support schemes for critical crops like rice, vegetables and fish, adding that the relevant agencies must be strengthened as well.
The Star
11-06-2025
- Business
- The Star
‘Put revised SST on hold'
Stretching their ringgit: Consumers are increasingly turning to dry foods in view of rising costs, resulting in a noticeable drop in the sale of fresh food items, say industry players. — LOW LAY PHON/The Star PETALING JAYA: Stakeholders want the government to review the expanded Sales and Service Tax (SST), warning that it could worsen living costs and place further strain on small businesses amid fragile economic conditions. They said concerns have been raised over the SST's cascading nature, lack of clarity and potential to erode household spending while squeezing business margins. The Federation of Malaysian Consumers Associations (Fomca) said the expanded SST, set to take effect on July 1, would disproportionately impact lower and middle-income groups. Fomca chief executive officer Saravanan Thambirajah said B40 and M40 households, which already spend a large share of their income on essentials, would feel the brunt of a 5% tax on items like cooking oil, fruit and cereal. 'It's not just about paying more. It's about trade-offs families will have to make such as cutting back on nutrition or postponing medical and educational needs,' he said yesterday. He added that the effect would be more severe in rural and semi-urban areas, where alternatives are limited. Although some basic items remain exempt, Saravanan said the taxation of raw materials and intermediary goods will eventually push up retail prices, especially when combined with recent fuel subsidy rationalisation. This could trigger a cost-push inflation cycle, he warned. 'To mitigate the impact, the government must expand targeted cash assistance such as Sumbangan Tunai Rahmah, consider zero-rating high-consumption items for B40 groups and strictly monitor prices to prevent profiteering,' he said. Saravanan also called for clearer public guidance, simplified lists of taxable items, consumer-facing price watch tools and stronger enforcement by the Domestic Trade and Cost of Living Ministry. Small and Medium Enterprises Association Malaysia warned that the SST rollout could significantly strain small and medium enterprises already burdened by high input costs and weak demand. Its president Datuk William Ng called for the SST registration threshold to be raised from RM500,000 to RM2mil, or for micro and small enterprises to be exempt altogether. He said the expanded SST now includes rent and business-to-business services, which could drive up operating costs and eventually consumer prices. Ng also called for immediate sector-specific guidance from the Customs Department to help prevent unintentional non-compliance. 'Without timely clarification, many SMEs may fall into accidental non-compliance despite the enforcement grace period until the end of 2025,' he said. He said a higher exemption threshold would be a more prudent move under current economic uncertainty. The Association of Private Hospitals Malaysia (APHM) called for a delay on the expanded SST on private healthcare services. APHM president Datuk Dr Kuljit Singh said more time is needed to ensure a smooth transition and full compliance, while also calling for clarity on how the tax will apply to professional fees and foreign patients residing in Malaysia. While the 6% service tax on non-Malaysian patients may result in a short-term dip in medical tourism, he said the long-term impact is likely to be limited. He warned that the expanded tax would increase administrative workload and operational costs, which could be passed on through higher hospital bills. The Associated Chinese Chambers of Commerce and Industry of Malaysia highlighted broader macroeconomic risks. Its president Datuk Ng Yih Pyng warned that expanding the SST amid ongoing global economic headwinds and uncertainty surrounding US tariff policies could strain SMEs and increase pressure on consumer prices. 'We urge that a review be carried out of the SST exemption threshold. It should be raised to RM2mil to relieve micro and small businesses,' he added.
Free Malaysia Today
22-05-2025
- Business
- Free Malaysia Today
Redirect subsidy reform savings to strengthen federal aid initiatives, says expert
The subsidy for RON95 benefits the richest Malaysians disproportionately. PETALING JAYA : An economist and a consumer group have urged the government to ensure that savings from fuel subsidy rationalisation be used to strengthen federal aid initiatives such as Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (Sara). Goh Lim Thye of Universiti Malaya and the Federation of Malaysian Consumers Associations (Fomca) told FMT such reforms are essential and timely given that blanket subsidies tend to benefit high-income households disproportionately. Goh pointed to data shared by Prime Minister Anwar Ibrahim showing that foreign nationals and the richest 15% of Malaysian consumers enjoyed as much as 40%, or RM8 billion, of the RON95 petrol subsidy last year. 'Blanket fuel subsidies are fiscally draining and structurally regressive, especially when higher-income households, who drive more and own multiple vehicles, end up receiving a larger share of government support,' he said. 'To ensure long-term sustainability, Malaysia must move away from untargeted, consumption-based subsidies toward a more needs-based, data-driven social support system,' he added. Finance minister II Amir Hamzah Azizan previously said the government is expected to save between RM7.2 billion and RM7.5 billion annually by introducing targeted diesel subsidies, almost double the initial forecast of RM4 billion. The government rolled out the targeted subsidy for diesel in mid-2024, while the subsidy for RON95 is likely to be rationalised by mid-2025. Goh said that reforming the subsidy system could help preserve public funds for key aid initiatives, including child nutrition, elderly care, and targeted cash assistance such as STR and Sara. 'Savings from such reforms, potentially in the billions, could also be redirected to enhance the depth and coverage of existing safety nets, support rural development, or improve critical services like healthcare and education,' he added. Fomca CEO T Saravanan said subsidy schemes should be implemented with a 'clear, transparent, and fair' targeting mechanism that includes robust monitoring and enforcement to prevent profiteering. 'Subsidy reform is critical for long-term fiscal and social sustainability, but it should be gradual, inclusive, and accompanied by effective communication and engagement with consumers to prevent shocks and negative public sentiment,' he said. Saravanan added that any move to redirect savings must lead to broader coverage and increased payouts in aid programmes to ease cost-of-living pressures. For Goh, the fuel subsidy rationalisation move is ultimately a test of the government's readiness to make difficult choices. 'Accurate targeting (also) depends heavily on reliable and timely socioeconomic data. (Therefore) platforms like the central database hub (Padu) must be updated continuously and verified to avoid exclusion errors,' he said. 'Without that, even well-intentioned redistribution could fail to benefit those most in need, undermining public trust and policy,' Goh added.
The Star
17-05-2025
- Business
- The Star
‘Define mixed development'
PETALING JAYA: Consumers and stakeholders have called for the proposed Real Property Development Act (RPDA) to clearly define what constitutes mixed development, which currently lacks protection under the law. Voicing their support for the government's proposal to introduce the RPDA, they say it is a long-overdue effort to protect buyers of commercial and mixed-use properties. They said mixed developments such as retail, commercial, small office/home office (Soho), small office/flexible office (Sofo) and small office/versatile office (Sovo) developments lack legal protection under the existing Housing Development Act (Act 118). Federation of Malaysian Consumers Association's (Fomca) chief executive officer Saravanan Thambirajah, emphasised the critical need for the RPDA to clearly define what constitutes mixed development. 'The Act must clearly state what qualifies as mixed development and ensure that all such projects are fully regulated – just like residential ones. 'This clarity is essential to ensure comprehensive regulation and protection for buyers in this evolving sector of the property market,' he said in an interview yesterday. Saravanan noted that robust safeguard measures are necessary to protect buyers from abandoned projects. 'We need mandatory developer licensing and financial checks, regulated accounts for buyer payments, strong and transparent Sale and Purchase Agreements, and a clear 'Option to Purchase' system to let buyers exit if a project is delayed.' He also advocated for the establishment of a dedicated tribunal or complaints platform for buyers affected by such issues. Reiterating the need for proper enforcement, he said: 'Laws are only as good as their enforcement.' 'We need a system that monitors projects, penalises rogue developers, and gives buyers timely updates and help when problems arise,' he said. Despite the support for the RPDA, Saravanan cautioned against hasty implementation. He stressed the importance of thorough consultation with all stakeholders – buyers, NGOs, legal experts and developers – to prevent unintended consequences or market instability. PMC Facilities & Real Estate chief executive officer Paul Puah Chee Keong lauded the RPDA, and called for the standardisation of assessment rates for commercial and residential developments. He highlighted a pressing issue where consumers are currently paying commercial rates for properties intended for residential or dwelling purposes. 'Even though it's a commercial title, many Soho, Sovo and service apartments are designed for dwelling purposes. 'It's only fair that these should fall under residential categories for taxes and utilities. The quit rent, assessment and utilities should be adjusted accordingly,' he said. Puah noted the RPDA's potential benefits in extending purchaser protections to commercial properties. 'If the new Act can extend protections similar to those in the Housing Development Act (HDA), it would be a significant improvement,' he said, referencing the HDA's existing safeguards like accrual accounts and transparent billing processes as 'sufficient.' He highlighted the importance of aligning the RPDA with the Strata Management Act to ensure seamless implementation by property management practitioners. 'The Act should clearly spell out management components for mixed developments. This includes service charges and other operational standards,' he said. Puah also stressed the necessity of clearly defining mixed developments within the RPDA. 'We need clarity to avoid confusion, as the market is already complicated by various terms like Soho, Sofo and Sovo. 'They are essentially the same,' he said, cautioning against being swayed by commercial interests that might manipulate definitions for profit. Strata Property Owners Association Selangor & KL advisor Law Hock Hua weighed in on the proposed Building Managers Act, which aims to tackle the widespread issue of inadequate property and building management. 'The chronic issue of poor property and building management is due to the quality and commitment of the building managers, not the quantity of licences,' he said. To address this, Law proposed property management exams at different levels, like the LCCI for accounting, to help employers assess candidates' academic qualifications. 'This structured approach would enhance the evaluation of managerial capabilities.' Secondly, he suggested that licensed property managers should place a bond when handling finances. 'Unlike unlicensed managers who must post a bond, licensed ones don't, which affects their commitment,' he said, pointing out the imbalance in the current system. Meanwhile, The Housing and Local Government Ministry had earlier said it is considering introducing a law to address abandoned commercial properties and to improve consumer rights protection, says its minister Nga Kor Ming. He said Sofo and Sovo properties are not covered under the current Housing Development (Control and Licensing) Act, which is limited to residential developments. 'Due to the absence of legal protection, buyers affected by abandoned projects under these categories often find themselves with no legal avenue for recourse. 'Following extensive engagements with industry professionals, NGOs and other stakeholders, the ministry has decided to study a new law known as the Real Property Development Act (RPDA) to resolve this issue,' said Nga in his speech at the StarProperty Real Estate Developers Awards 2025 on Thursday. Nga said the RPDA will include certain commercial developments which will safeguard the rights of property purchasers. Nga also said his ministry is mulling the Building Managers Act to address the chronic issue of poor property and building management. At present, he said there are only 594 firms licensed to practise management, serving 26,334 strata schemes or 2.91 million strata units in Malaysia. 'This highlights a serious gap where there are insufficient licensed firms to effectively manage all existing strata schemes. As a result, many property owners and tenants face significant challenges due to declining property values caused by poor property management,' he said. 'With the Building Managers Act, along with the soon-to-be tabled Urban Renewal Act, we are committed to addressing the root problem of aged, dilapidated urban buildings,' he added. As of March, the ministry, through the Taskforce on Sick and Abandoned Private Housing Projects, has successfully revived 1,044 private housing projects nationwide worth RM100.1bil in total, benefiting 124,539 homebuyers.
