Centre urges Single Pricing Policy for fairer playing field

PETALING JAYA: The Centre for Public Policy Studies (CPPS) Malaysia has recommended a Single Pricing Policy in order to establish a fair playing field for all businesses and eliminate hidden costs.

"In Malaysia, we need to enforce Single Pricing Policy where businesses must display standard nett prices. Businesses must sell products at face value with no additional surcharges, by displaying prices which are all inclusive of the service charge and prevailing government tax," said CPPS research and programme executive Jarren Tam.

He said consumer awareness is low and with the upcoming Goods and Services Tax (GST), surcharges will not be consolidated and disappear. If there are no changes in the current situation, consumers will continue to pay an exorbitant 16% on top of restaurant bills.

In his paper titled "Inconsistent Pricing: Will GST implementation abolish surcharges?", Tam said it would be timely to implement the policy along with the GST, which should make it compulsory for producers to include the tax into their menu pricing.

He told SunBiz that while it may be too late to be in time with its implementation next month, it should be considered for implementation by next year.

Tam said besides establishing a fairer playing field for businesses, the "hidden cost" element can be eliminated, enabling consumers to make better decisions in minimising their cost of living.

The Single Pricing Policy has been introduced in Australia in 2008 as the Australian government felt that consumers should be able to readily identify the price they will pay for a product or service.

The law requires businesses to show an all-inclusive price or a single figure that reflects the total price to be paid in their advertising.

"For as long as we remember, certain prices we observe do not reflect the true value we have to pay. Has there been extra charges on your mobile phone bill? Have you received a bill adding surcharges far exceeding menu prices when dining at restaurants? These prices you pay deserve more attention as they distort a consumer's personal budgeting.

"Basically, advertisement of prices are misleading and usually include vague surcharges. The history and nature of these hidden costs has had an arguably significant impact on consumption patterns but is little-known to most consumers," said Tam.

He said surcharges come in several forms, usually concealed in small print and gives rise to inconsistency of advertisement pricing and in many cases has caused confusion and uncertainty among consumers.

"The restaurants and hotels industry, prime abusers of surcharges, causes consumers to suffer from two key issues - service charges and fine-print pricing," he added.