Why is DAP urging the government to retract the electricity tariff hike?

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DAP Urges Retraction of Electricity Tariff Hike Due to Economic Concerns

DAP secretary-general Lim Guan Eng is urging the government to retract the recent electricity tariff increase for commercial and industrial users, citing potential negative impacts on Malaysia's economic performance in the current year. This call is part of a broader appeal for the government to address several critical concerns affecting businesses, which Lim argues are essential for mitigating adverse effects on company profitability, survival, and overall economic growth.
Impact on Business Profitability and Survival

The imposition of higher electricity tariffs, implemented through surcharges and the withdrawal of rebates, is expected to significantly affect businesses, particularly those operating on thin profit margins. For a business with a profit margin below 10 per cent, an 18.4 per cent increase in utility bills could translate to a profit reduction of up to 40 per cent. This substantial cut in profitability poses a serious threat to the survival of many enterprises.
Broader Economic Challenges Facing Businesses

Beyond the electricity tariff hike, Lim highlighted six immediate concerns that could adversely impact businesses. These include a persistent labour shortage, which hampers the ability of some businesses to meet heightened demand, and rising inflation, which increases the cost of food and basic commodities. The weakening ringgit further exacerbates these issues by increasing the cost of imported goods, adding another layer of financial pressure on Malaysian companies.
Concerns Regarding Governance and Competitiveness

Further compounding the business environment are issues of excessive bureaucracy, inefficiency, and policy inconsistencies within the government, which breed doubt rather than confidence among industry players and the public. Moreover, Malaysia's declining ranking in the Transparency International Corruption Perception Index, dropping from 51 to 62, is seen as a factor that will negatively influence the business sector. The government's perceived failure to effectively harness advanced technologies like automation, AI, IoT, and 5G also raises concerns about Malaysia's ability to remain competitive on the global stage, especially when compared to countries like Vietnam and Thailand.
Unfulfilled Promises and Samenta's Concerns

Adding to the list of grievances, the government has also failed to act on its promise to consider extending the bank loan moratorium and interest waiver for another six months, a measure aimed at assisting businesses recovering from the economic impact of the Covid-19 pandemic. The Small and Medium Enterprises Association of Malaysia (Samenta) has specifically questioned the rationale behind Tenaga Nasional Berhad's (TNB) decision to increase electricity prices, especially when the utility company reported profits in the previous year. This raises questions about the necessity and fairness of the tariff hike for businesses already facing significant financial challenges.

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Why is DAP urging the government to retract the electricity tariff hike?

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