SHAH ALAM, 9 Jan: The number of people in this country that will go bankrupt will increase due to the subsidy cut for sugar, fuel, electricity tariff and other household goods, which directly increases the cost of living.
Singapore’s Straits Times reported today that last year, more than 60 people were declared bankrupt daily until September, with the figures up from 53 people a day in 2012.
The Chief economist of RAM Holdings, Dr Yeah Kim Leng, said that this is following the government’s subsidy rationalisation to address the budget deficit, which will cause the number of bankruptcies in Malaysia to rise.
“We expect the number of wrongdoings to rise, especially among young workers in the private sectors who have access to excessive credit via credit cards and personal loans, but may not earn enough that it would be commensurate with their lifestyles.
“The question is, by how much, and that is the worrying part,” Dr Yeah was quoted.
He said however, that unserviced loans were at a “manageable level” for the time being. But there are signs of this worsening.
The daily also reported that, credit card debt has gone up. The amount owed to banks for longer than six months to November last year stood at RM426.4 million, compared with RM402 million in the same period in 2012.
Prior to this, the Member of Parliament for Bukit Katil, Shamsul Iskandar Mohd Akin, said that the BN Government’s policy weaknesses is they key factor for why 130,000 people have been declared bankrupt in a period of seven years.
He said that the financial problems due to slow increases in salary, the high cost of living and the debt burden for households are among the key factors why individuals have been declared bankrupt.
Shamsul said that the BN Government continues to burden the people by announcing a series of price increases; for goods, toll, and fuel and so on.
This contributes to an economic climate which is not balanced with the people’s income and expenditure.
The Federal Government previously announced that 129,640 people have been declared bankrupt from 200 till 2012. From the number, 68,299 are individuals below 45 years of age.
Among the factors leading to bankruptcy is the failure to repay hire purchase loans for vehicles, house loans, personal loans and housing.
