Kuala Lumpur, 20 July 2016 – The Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Hamzah Zainuddin said last Thursday that the government is considering to abolish the Price Control and Anti-Profiteering Act 2011. This is the right move to make and Datuk Seri Hamzah should be supported, says the Institute for Democracy and Economic Affairs’ Chief Executive Wan Saiful Wan Jan.
Datuk Seri Hamzah stated that his ministry was given the directive to look into the Act following a meeting between the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) and the Prime Minister. His Ministry would be conducting consultations with relevant stakeholders such as consumers, industry and NGOs soon.
Responding to this development, Wan Saiful said, “This is a brilliant first step by the Government to ensure a more competitive market in Malaysia. Although the Act was implemented to counteract sudden increases in prices due to the Goods and Services Tax (GST), the market has since adapted to the GST. Hence, there should no longer be a need for such a law. The reality is, most legislation have a shelf life because the situation may change several years after a law has been introduced and passed. Many countries have a “sunset clause” for their laws but since we do not use that system, it is good that the Ministry is proactively reviewing the Act.”
“When it comes to price control, many economists would say that it is detrimental to both consumers and the industry. Prices are a function of supply and demand. The government does not have a scientific method to determine what prices should be. If prices are set too low by the government, there will be fewer players in the market. Sellers may not want to sell, which means the government’s mistake will actually create scarcity in the market. In such a situation, the government’s desire to keep prices low will only cause the black market to flourish. It could actually even drive prices upward.”
“The reality is that governments cannot be the ones to calculate the best price for the market. No one person or committee in any institution is clever enough to undertake this role and anyone claiming to have this knowledge would only be fooling themselves.”
“Instead of controlling prices, the government should make sure the market is regulated to allow for consumer choice to be enhanced. The easiest way to do this is by making sure price tags are clearly displayed. This will help the consumer to decide whether or not they want to buy from a particular seller. We must concentrate on helping consumers make informed decisions. Price tagging is the cheapest way of doing this,” Wan Saiful emphasised.
“Consumers themselves must make informed decisions. We should stop patronising shops that do not display prices clearly. If the displayed prices are too high, we must walk away. Stop buying from them. That is the best way to teach unscrupulous businesses. Eventually the shop owners will realise that they cannot continue to charge exorbitant prices. Rather than complaining, let us take action and choose to buy from shops which have cheaper prices. We don’t need government regulation if we collectively act together. Remember, we are the market.”
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