finance

Don’t waive the wave

wave

In Malaysia they are trying to phase out signing when you use a credit or debit card, in favour of using a PIN number. But below a certain figure, RM250 in Cold Storage, for example, you can just wave your card over the reader to pay.

As there are CCTV cameras everywhere – some that would see the number you punch in if you use a PIN, I would prefer to use the wave payment instead, as it would be more secure. Alternatively, check around for CCTV cameras first to see if you can input the PIN securely.

But don’t forget to use cash – if you don’t use it you’ll lose it as banks (and their governments) would prefer to go cashless – then everyone is a captive customer, and they’ll be able to charge you for having an account instead of paying you interest.  And, of course, it gives governments almost total control over you, as if you don’t cooperate, they simply freeze / confiscate your electronic money – and you won’t be able to buy or sell any more – including useful things like food.

Keep an eye out for GST mistakes

Keep an eye out for GST mistakes. To illustrate, it is easiest just to tell my story.

Before I start, let me just say I bear no ill-will towards Cold Storage for this incident. Mistakes happen. The government has forced huge costs on businesses (and thus consumers) by making them unpaid tax collectors, and businesses would have wanted to keep their costs in implementing this as low as possible.  Mistakes are likely.

I only wanted to buy coconut oil, glanced at the price, picked it up and went to the checkout.  I paid in cash, and when I received the change, as I vaguely remembered the price, thought I had been overcharged.  So I queried this with the cashier, and she showed me the price on the receipt.  She had given me the correct change according to the receipt.

receipt

receipt

Something seemed wrong, so I returned to the shelf and photographed the price and GST rating there.

price and GST rating of 0% on shelf

price and GST rating of 0% on shelf

The price on the receipt was RM64.91 ex-GST, but the price on the shelf was RM64.89.  Now, the government has decreed that the price indicated must include GST.  So the proper price should be as shown on the shelf.  And GST was added, by mistake, to a slightly different price for the product.  This is three mistakes.

As is usual here, you explain the problem to one staff member, they go and get another staff member – and you have to explain all over again.  Then they go and get another staff member, and you start again from the beginning and explain it all again.  The shelf photo I had taken  made it easy for them to understand. So, the fourth staff member gave me a huge form to fill out, I said, as usual, I’d only fill out my name and phone number, and then I got my RM3.90 back in cash.  And they apologised nicely and shook my hand.

As much as possible I try to avoid buying products that have GST on them, so for me this was the main point in this exercise once I had found the mistakes.

One week of GST

I’m not a big shopper.  But in one week of normal shopping, buying the odd thing, eating out or having a drink, I notice how much more most things cost.  This is, of course, due to the 6% GST, but also due to retailers and establishments hiking their prices in addition.  I can understand this to an extent, as a business being a tax collector for the government incurs accounting, handling and software costs which would have to be passed on to the customer. Thus the cost to the customer is presumably in excess of the 6% GST.

However, it seems to me some of the price rises are greater than these extra costs would justify.  At Eurodeli the other day the 3 drinks for RM39++up until now has become 2 drinks for RM40++.  ++ was 10% service charge and 6% government tax.  The new ++ is 10% service charge and 6% GST. One drink increased from RM13 to RM20.  The same deal has disappeared from the Tree Top Bar.

But at Daiso, where everything was RM5, each item is now RM5.30 – so 6% more – no price gouging here, just straight addition of GST.

I’ve been admonished that my blogs on GST are one-sided. What about the price drops?  Well, if you buy a car, on some models you may save RM100 or a little more.  If you buy a Merc. you might save considerably more.

Another friend wrote in a comment that this extra tax was the straw that broke the camel’s back, and expats are leaving for other countries.  Namely Indonesia, the Philippines and Europe.

Reading the US “Money” magazine recently, I spotted an article on retiring abroad.  They quoted monthly costs for living in some other countries – Malaysia USD$1,500, Ecuador USD$1,500, Malta $2,000, Mexico $2,200 – that’s all I remember.  They also recommended renting, as opposed to buying, so I assume this amount includes rent.

Just looking at Malaysia, where $1,500 buys RM5,400, I think this is hardly realistic.  And the USD is much higher than it has been for a while. The magazine appears to be aimed at  middle class Americans.  Renting a condo of a suitable standard would cost at least RM4,000 alone. Even if they lowered their standards they’d have to pay RM2,500 for rent.  Then, renting a car long-term. And normal living costs.  I think they would have to really cut back to live on this amount. It is certainly not impossible, but they would have to live quite differently from what they are used to.

It’s been a while since I was in Malta or Mexico, so I have less of an idea of living costs there, but I doubt the figures for Malta are realistic, too.  So as much as I hate yet another tax, and the suddenly increased cost of living, I am not moving.  If you are footloose and renting, without too many possessions, it may be worth the trouble.

Maxis and changing terms and conditions

My understanding of the way a contract should be is that both / all parties agree to something, and unless they renegotiate and come to a mutual agreement, then the terms remain the same.

However, when a company is large and has a monopoly or is one of a small number of suppliers to individual consumers, they seem to have as part of their terms and conditions that they can change these conditions if they want to.  Making the contract fairly worthless as any protection for the consumer. Pretty much the same as a government (which are all corporations anyway), they just dictate their conditions.  The contract only really protects the supplier.

Maxis, the mobile phone network company,  has just sent me a text, to which rudely I cannot reply, to tell me they are now adding an extra charge.  They have not asked for my agreement or even understanding.

I will now be looking for a new supplier.

As numbers are portable it is just a bit more trouble. And I do not find Maxis particularly good.  Their signal strength seems to have deteriorated over the years, and their service markedly so. It can take five hours for a text to arrive from downstairs to upstairs in my house – from my wife to me – on their own network. Similar with phone calls.  Most of their shop fronts are not useful, with the exception of their Menara branch.  So this latest outrage is the prompting to see if there are better deals for us.

And it puts the kibosh on any idea of using their fibre network for the Internet, which I had been considering – if they are so cavalier at changing contract terms it is just too scary.

 

Cost of living in Penang in March 2014

Just to give you an idea of what it could cost to live in Penang on a monthly basis, where in March 2014  GBP£1 = RM5.4; USD$1 = RM3.2; AUD$1 = RM2.9

I wrote the same blog in November 2012, so prices (and sometimes quantities) from 16 months ago are in brackets to show the rise in prices.

Here is a site I recently found that is more comprehensive than my blog:

http://www.numbeo.com/cost-of-living/city_result.jsp?country=Malaysia&city=George+Town 

When first here we lived for RM30 per day, plus rent.  Below gives more details of costs of a comfortable life.

Rent:
RM300 in a low-cost condo, with no facilities, and probably in a poor location in a badly maintained building.
RM2,500 for a three bedroom two bathroom condo of about 1,000 square feet, with pool, gym, parking space etc.  in a nice, reasonably maintained building.
And up for bigger, better appointed condos.
Houses, RM2,000 or more.

I think these prices have increased a bitsince I wrote them 16 months ago, but feel presently that the market is in a government induced slump.

Home ownership:
Condo: maintenance fees.
House: see tax section.

Utilities:
Electricity is metered, but water is a fixed charge, and you get gas delivered in canisters.

Electricity charges were recently substantially raised. We don’t yet know how much more this is actually costing us. The government charges comparatively more per kilowatt for more consumption, so the higher bands have increased substantially. I suspect at least a 20% higher bill.  It was about RM200 for electricity, using air cons when necessary, heating water for showers, lighting, TV etc. Expats report bills ranging for less than RM100 up to RM800, depending on their homes, and usage, of course. Our bill is very similar to that of the UK, but in the UK we lived in a two bedroom flat, with gas central heating, but, importantly, we were out of the flat working five days a week, which would have kept the bill much lower. Thus, electricity is costing us less here, even though it cannot be said to be cheap.

(UPDATE:  During very hot February we used the aircons more.  Our usage was 12% (kilowatt hours) more than the bill for December, but our bill was 27% more.

RM10 per month for gas. There is no town gas, so you have gas delivered in canisters, costing RM30  (RM27) or so for medium size canister. This has lasted us from about three months to about six months, depending on how much we ate in.

RM3  for water; it costs RM6 minimum per two months, and usually we only use the minimum. I use rainwater to water the plants where possible, because the plants seem to prefer it, but in the drier months use town water.

Currently a phone line and 4mbps ADSL Internet connection with Telekom Malaysia costs RM140 per month.  For 8mbps it costs RM160 per month.

Groceries:
RM1,200 per month (RM900) for groceries. There are supermarkets and markets for fruit and vegetables. But if we buy everything just from Tesco, this is an approximate figure, although prices are rising significantly.

Health Insurance:
RM560 for two of us for policies covering hospitalisation, taken out locally, but covering world-wide.  Visiting a doctor in a clinic used to cost around RM35 in this area, or in a hospital RM80 or more. Doctors’ prices were increased by 14.4% this week, with the previous price range for visiting a doctor’s clinic from RM10 – RM35, and the new range from RM30 to RM125.  This doesn’t appear to be 14.4% to me, but that’s what the newspaper reported. Here is a chart taken from The Star:

2014-03-08 12.52.45s

Our insurance agent told us medical procedures are increasing in cost by 20% per annum, so at this rate very soon Malaysia will no longer be a low cost medical destination.

Tax:
RM0 if you are renting. The service charge for the condo is paid by the owner, as is any tax on the property. If you own a house, there is a land tax and a charge for the local council’s services, which amount to about RM500 per annum for both for a modest property. The Malaysian government plans to introduced a GST of initially 6% in April 2015.  This is being universally cheered by the media. Since the government seems to expect people/companies to act as their tax collectors without recompense, I assume the extra costs of this tax collecting and accounting will be passed on to the consumers, thus having a bigger than 6% impact.  The government has recently substantially increased capital gains taxes on property sales.  Now the tax is 30% for properties sold within 5 years, and 5% on properties sold during or after the sixth year. (Previously 15%, then 10%, and after 5 years 0%).

Petrol:
RM2.10 (1.90) per litre – I live centrally, so even when I drive it is only for about 10 minutes one way, so in a month I spend less than RM100 on petrol.

Car running costs:
Car service – about RM400 for a Japanese car to perhaps RM1,000 for a Mercedes. I only need it once a year as everything is close by in Penang, so I don’t drive many miles. Road tax depends on engine size – see this calculator. Some things are really cheap – puncture repair RM8, for example – with immediate and friendly service. Car insurance, of course, depends on the car value and your no claim discount.  RM2,000 per year for a medium size car, perhaps, with full no claim discount.

Parking:
RM0.40 (RM0.30)per half hour, and up, on Penang Island, for street parking by coupon (previously meter or with parking attendants). RM5 for parking all day, as a guideline. On weekdays it costs RM1 for three hours parking in Gurney Plaza, on weekends more. You can park free, too, in some supermarkets, on suburban streets, at some businesses.

Taxi:
I have heard that metered fares may double soon, but know no more.  If so, drivers will apparently “have to” use their meters.  It is so long since I caught a taxi I can’t update this figures from last time: RM10 for a short distance, RM15 for about 10 minutes drive, and up for longer. Taxis are supposed to be metered, but drivers usually prefer not to use meters and quote a price – which they usually won’t lower if you try to bargain.  Occasionally they will, though.  The quoted price and the metered price often work out similar, anyway, and I prefer the former. Pulau Tikus to the ferry terminal is RM15; Pulau Tikus to Queensbay Mall RM35. Pulau Tikus to airport RM55ish. Prices significantly higher between midnight and 6AM, and to the airport there is a special airport charge. Personally I think if you choose a regular taxi company, or several drivers you like, then you will find them honest and reliable, and have no problems.  But even picking taxis from the street I have found the drivers honest and mostly friendly – in Penang. As for KL, I hear the situation is different.

Public Transport:
The ferry to Butterworth is free; returning is RM1.20 as a foot passenger, RM7.70 for a car with passengers. Otherwise there are Rapid Penang buses and their site still says the minimum fare is RM1.40.  Beware of pickpockets – friends of mine have had things stolen on the bus. I would take nothing valuable, and only the money I needed, and not travel when the buses are full. There are few seats, so it’s likely you will have to stand. Neither are they reliable, and drivers often don’t speak English.  However, they are air-conditioned.

Wine:
Alcohol is highly taxed, and costs more than the UK, and far more than Europe.  One 320 ml (330ml) can of Carlsberg beer in a supermarket is RM7.49 (RM6) and up; a 700ml bottle of local vodka is RM23 (good for cocktails), a 700ml bottle of imported vodka about RM120; a 750 ml bottle of vintage wine bottled in country of origin from RM35 if you look around; 750ml sparkling wine from RM70 if on special; imported liqueurs generally well over RM100. Mixers like a 325ml Schweppes ginger ale and tonic water etc. cost about RM1.80 (RM1.50). Coke is now RM1.89.

Eating out:
Can be free, at some temples, or on festival days, where shops hand out food, and bottles of water.  Generally, eating out is cheap, but drinking alcohol out is expensive.  A 660ml bottle of local beer is around RM15 at a hawker centre – but noodles might cost you RM3. Of course western food in upmarket restaurants is far more expensive, and a small glass of wine could cost RM20 or more.  Nevertheless, expensive western style restaurants are good value for food if you compare the price to London, Paris, Sydney etc. Local cooking uses far too much sugar, and MSG, so eating out frequently, especially in cheap places like hawker centres,  over a longer period is probably not healthy, unless you are very selective.

Cinema:
From RM8 (RM7) at Gurney Mall. Yes, very affordable, and cinemas are quite empty weekdays, during the day. Senior discount, when one is over 55,  makes it RM1 less. Wednesdays are discount days, too – RM1 less, but seniors get no additional discount on that.

Cable TV:
I am not at all interested. This is the Malaysian provider.

Clubs:
You can join local clubs, such at The Penang Club, The Penang Swimming Club, the Penang Sports Club etc. You need to buy a membership, and then pay monthly dues, which are about RM12,000 and then RM165 monthly for the Penang Club; about RM25,000 membership fee for the Swimming Club; monthly fee appears to be RM45 per month according to their website; and RM15,000 and RM100 monthly for the Sports Club. You can sell the membership in the future, if you wish.

So, as you can see, many prices are increasing substantially, with more to come, and this is before the introduction of a GST, which will further increase prices.

Did I forget anything important?  Let me know if I did, and I will add the details if I know them, or can find them out.