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No way gov't can enforce price controls
Vijay Kumar Murugavell | Jun 11, 08 4:18pm

Recently, after an unprecedented increase in petrol prices at the pump, Domestic Trade and Consumer Affairs Minister Shahrir Abdul Samad - while admitting that the government is expecting a chain reaction triggering other increases - was quoted as saying:

‘Enforcement officers will be making inspections and I hope the public and the media will also highlight drastic increases. We can do, and will do an audit, for any business. We can ask the trader to do a list of his costs and if the trader’s new prices are not justified, we will advise him or her to adjust it.’

I would like to say to the minister that in the first place, your officers have no jurisdiction to implement what you are suggesting unless it is a controlled item. Other than that, pricing is based on offer and acceptance.

I am really disappointed as I consider Shahrir as one of the better and more competent ministers.

His choice of the words ‘we will advise him or her to adjust it’ shows clearly that nothing can be done if they do not comply.

Why waste manpower on something that you cannot enforce and mislead the public that you can do something about it when, in fact, the government does not have the powers to enforce under the Price Control Act 1946 unless the minister is going to amend the act to include chicken rice, teh tarik, putu mayam and a whole lot of other consumer items.

I can imagine Shahrir’s enforcement team already having their hands full checking on the smuggling of controlled items alone.

Stop this rubbish. It just opens doors for overzealous and corrupt officers to harass and intimidate traders. For example, rice is a controlled item but chicken rice is not. The ingredients can vary, the prices can also vary depending on location and popularity.

This technically means that if I operate my chicken rice business legally, have all the proper licensing, display the prices prominently, adhere to the hygiene standards and employ workers legally - I can charge RM50 per plate and you cannot do nothing against me!

In fact, if I was such a business owner and the enforcement officers turned up demanding to do an audit and justify my charges, I would tell them to get lost and the next day my lawyers will contact the domestic trade and consumer affairs ministry.

The irony is that if I take the ministry to court and I win a monetary award for damages as the court sees fit, sadly this will be borne by the taxpayer. The only person who has the authority to audit my costs is the Inland Revenue Board, and that, too, only to determine if I am evading my taxes.

The only persons with the power to punish, in this case, are the consumers by boycotting my eatery if I continue to be stubborn and still sell my chicken rice at RM50 a plate. I will simply be forced to adjust my prices or close shop.

What the minister is suggesting is just futile as it is not enforceable and the sheer logistics and manpower requirements of such an undertaking is humongous. I will not digress further here with an economics lesson on supply and demand. Market forces will always dictate prices.

On March 8, the people sent a clear message through the ballot box. They are perfectly capable of sending a message to unscrupulous traders too.


 
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