According to an article (14
July 2012)is about the opportunity costs of having a car and having homes
in Malaysia and the problem is because the car of Malaysia has a higher cost as
the house in Malaysia.
Opportunity
cost is something that you must gives up to get a better choice when making a
decision. The two components of opportunity cost are the things you can’t
afford to pay for it and the things that you can’t spend the time for enjoy it.
In this case, the author is making a decision either to buy cars or homes. In
last time, the money or the income is enough for him to buy cars when he is
fresh graduated but due to the changing of society today, the new generation
now which is fresh graduate from university is hard to own a car because the
cost of the car is very higher and this problem make them hard to make decision
to take the maximum car loan financing. For example, it will cost a fresh
graduate of four years of his salary to own a car in Malaysia. The local car
costs about RM 60,000 and foreign car cost about Rm 120,000.The median price of
an apartment in the Kiang Valley is around RM300,000, equivalent to 10-year
gross income of our fresh graduates and costing their fresh graduates 13 to 18
years of gross yearly income to purchase a house. Those fresh graduate needs to
take an opportunity costs to either buy a car or a house because the time lapse
to return the loan is long.
In addition, they also need to consider on the expenses
and other commitments such as the food, living material and rent. So it makes
them hard to cover and adapt their life with over expenses. Compare to the
people in Washington, if they earn US$3500, they can easily to get or buy the
Japanese Honda Civic or Toyota Corolla which is worth RM 50,000 because they
can easily to cover the loan and it just take lower percentage of their income.
While in Malaysia, people are hard to buy foreign car because it take a longer
time loan and the lower income is hard to cover. Next, a local car also need to
cost long time period to a fresh graduate but if compare to foreign car is must
more easily because the cost of local car is cheaper than foreign car.
In reality, it means they need to take a longer loan to purchase the car which
will cost them opportunity of owning a home. In this situation, it make the
young generation who fresh graduated forced to make a decision either to buy
car first or buy house first.
As we seen, many fresh graduated in Malaysia are willing to buy a car first and
they willing to pay for the car first due to the transportation system can be
improved. But if they can afford to buy the land at that time, the price of the
property will increase due to the higher construction cost. Moreover, the price
of the land also will keep on increase on the future. For example, if after a few years inflation will occur
on that time and the population will increase. When the population increase
that means the demand of the house is higher, so the price of the land will
increase and at that time consumer will harder to afford to buy a house. On the
other hand, the car is getting to face depreciation for every year so people can
consider to buying house as an investment.
Government should using price floor to control the income of the labour.
Government have to increase the price floor of the wages or the salary of the
labour. When the price floor is applied into the labour markets, it will call
as a minimum wages or salary. The price floor can be use to prevent the labour
income from failing below a certain level. Hence, this can help to protect
labour’s income from being exploited by their employees.
Government also need to decrease the income tax of the citizen. When the
government decrease the amount of income tax of their citizens, their
disposable income will increase. So, when their disposable income increase
their purchasing power will also increase and hence they could able to purchase
more.
Lastly,
government should improve the public transportation in Malaysia such as bus,
LRT or KTM. When Malaysia has a better transportation system, it wills
more easily to attract the foreigner tourist come travelling in Malaysia, and
the economy of our country will become better. In addition, it also can reduce
the option of citizen for buying the car , so that can be saving more the
expense such as petroleum expense, car service expanses and sun more can also
reduce air pollution.
Author : TEY KAH SHEEN
1 comments:
totally agree with the malaysia fresh graduate from university is hard to own a car!!!
Post a Comment