KUALA LUMPUR, March 5 — Deputy Domestic Trade and Cost of Living (KPDN) Minister Fuziah Salleh has called for a whole-of-government approach to identify and address the root causes contributing to rising cost of living in the country, reflecting on the ministry’s Menu Rahmah initiative.

Labelling the programme as "phenomenal”, having been formulated and executed with no dedicated government funding, Fuziah said that issues such as food security and living wage need to be resolved, to empower the people to live a decent life.

Food security issues, if left unchecked, she said, can cause a domino effect and affect initiatives such as Menu Rahmah.

"It is a whole supply chain. That is why we have to address the issue from its root, and it will take time. Food security, we are looking at planting paddy and having higher yield. We are looking at planting onions now. We should be 30 per cent self-sustaining in a few years’ time, and we are looking at what else we can do to be self-sustaining. But, in the meantime, we still have to address the issue of cost of living.

"We are not self-sustaining. Like onions, we have just started planting onions. Rice, raw sugar, 100 per cent imported. Of course, it will affect the price of cooked food.

"There are six clusters which we categorise as cost of living. Of course, the biggest cluster is food, second cluster is education, followed by healthcare, housing, transport and utilities. Inflation is worldwide. It is a global phenomenon.

"But how to address these? We have two strategies. One is trying to control the price, which we can’t because we import a lot, another one is to raise the income. So we are also looking into that. Raising the income. Reviewing the salary adjustments. When income does not go up, prices of goods go up, they (people) do not have disposable income,” she added.

Fuziah said this is why the Payung Rahmah initiative which has programmes such as Menu Rahmah, Jualan Rahmah and the special discount incentive for traders offering Menu Rahmah, has been a crucial element in helping to bring down the nation’s inflation rate.

Subsidies to help everyone

She said that when the ministry initiated Menu Rahmah on January 31 last year, analysts predicted that it would take several months for the outcomes to be noticeable, and an assessment of the Consumer Price Index, indeed showed a decline in the inflation rate, particularly for food consumed outside the home, which contributed to the overall reduction.

This is when the ministry developed Jualan Rahmah, to help reduce the cost of food inside the home.

"We have a list of items like rice, cooking oil, sugar, sardines, and chicken. At that time, it was expensive, so we gave subsidies. So that is what we do with Jualan Rahmah. So, normally, the operator, which are the supermarkets, will offer some discounts and we will top up with more discounts.

"For example, when we had a problem with rice, we launched Jualan Rahmah Beras. We subsidised quite a lot, because we don’t have local rice sales and it is difficult to get local rice sales. So what do we do? We use imported rice. Five kilos of rice in the market is about RM23, RM24, so we sell it for RM15 in our Jualan Rahmah. We subsidise about RM6, RM7. It is a lot,” she said, adding that both the Menu Rahmah and Jualan Rahmah initiatives became a hit and brought the inflation rate down.

In August 2023, Malaysia’s inflation rate remained steady at 2 per cent, a rate that was consistent with the growth recorded in July 2023, as reported by the Department of Statistics Malaysia (DoSM).

DoSM attributed the stability of the inflation rate in August to several factors, including a slower rate of growth in the restaurant and hotel sector, which declined to 4.7 per cent from 5 per cent in July 2023; a decrease in the growth rate of food and non-alcoholic beverages to 4.1 per cent from 4.4 per cent in July 2023; and a moderation in the growth rate of miscellaneous goods and services to 2.4 per cent from 2.6 per cent in the previous month.

The food and non-alcoholic beverages group, which contributes 29.5 per cent of the total consumer price index (CPI) weight, was a significant factor in maintaining the stability of the inflation rate.

"So that is why the government has increased the subsidies or the budget for this year, which is RM200 million.

It helped a lot. You can see that month by month, these two categories (food outside the home and food inside the home) decline a lot,” she added.

Why has the hype declined?

Fuziah said this could be attributed to the lack of awareness among restaurant owners, that they will be justly subsidised for offering Menu Rahmah in their outlets.

She said that in the initial days of Menu Rahmah, the restaurant operators were informed that the ministry will work to secure some form of incentive from the government. This is aimed at helping them cope with the rising price of essentials, as their profit margin will be low with the Menu Rahmah offering.

"So what we did at the end of last year, we launched the special discount card for those offering Menu Rahmah. We worked together with our strategic partners-six hypermarkets that offer discounts to all the operators of Menu Rahmah. It is quite high. Some of the supermarkets offered up to 40 per cent in discounts. If we give the card to the operators, then they are eligible for the discounts.

"But I think the issue is that the operators are not aware that there is such an initiative,” Fuziah said, adding that she will be exploring the use of Ramadan bazaars to campaign about the said offering.

However, Fuziah clarified that the cards cannot be immediately issued upon online application, as the ministry must first verify that the restaurant indeed offers Menu Rahmah at the RM5 price set by the government. This is to prevent any instances of profiteering through the use of subsidised food items.

"We have to go down and make sure they are really serious about offering the menu. Then we will give them,” she said, adding that the application processing time can take six months.

She said to date, the ministry is processing applications from 93 restaurant owners for the said card. Up until January 31, 2024, 2,134 restaurant owners have registered to provide Menu Rahmah.

"Because some of them are big operators so they don’t apply (for the discount card),” she added.

On the metrics used to measure the success of the initiative, Fuziah said the findings have been very encouraging.

"We hired consultants, and we did an impact study on the Payung Rahmah initiative. We studied the whole initiative including Menu Rahmah. So the findings are very interesting. 72 per cent said that it succeeded in controlling the cost of living,” Fuziah said.

In January last year, former KPDN minister the late Datuk Seri Salahuddin Ayub, said that around 12,000 premises had already offered the menu, including restaurants affiliated with the Malaysian Indian Restaurant Owners Association (Primas), the Malaysian Muslim Restaurant Owners Association (Presma), Malaysia Singapore Coffee Shop Proprietors General Association (MCSPGA), and Mydin supermarket outlets nationwide.

Lessons learned and progression plans

"So hopefully, after this we can continue to offer Menu Rahmah at night markets and so on,” she added.

The sustainability of the programme under the Pakatan Harapan-Barisan Nasional coalition government, has been questioned, as the late Salahuddin had previously been reported saying the government was trying to make it a "zero-budget initiative”.

"Even these discount cards had no funding from us. Nothing in the budget per se. By right, we cannot use the money for Menu Rahmah, so we cannot give the operators anything, compared to Jualan Rahmah where things are subsidised.

"So when we have zero budget allocation and yet we can make it a success. It is because of strategic working together with partners like associations, hypermarkets, to bring in the discount cards. So you see, without any budget allocation we can do that. So I think it is phenomenal.

"The challenge is to think outside the box to work, when you have zero funding and to bring results,” she added.