Subsidy Cuts A Must To Save RM103 Billion In 5 Years To Reduce Deficit And Debt

May 27, 2010 20:46 PM

KUALA LUMPUR, May 27 (Bernama) -- Malaysians must bite the bullet and wean off subisidies to save the government RM103 billion in five years to reduce the nation's deficit and debt, said Datuk Seri Idris Jala, Minister in the Prime Minister's Department.

He said the government would focus on big ticket items such as fuel, electricity and toll to achieve the savings but it would continue to subsidise the poor and disadvantaged.

"The time for subsidy rationalisation is now. Otherwise, we have a time bomb on our hands," Idris said on the open day on the subsidy rationalisation plan proposed by the Performance Management and Delivery Unit (Pemandu) of the PM's Department.

Idris, who is Pemandu CEO, told a packed hall at the Kuala Lumpur Convention Centre, that Malaysia was one of the highest subsidised nations in the world and the subsidies must be phased out gradually.

"We do not want to end up like Greece. Our deficit rose to a record high of RM74 billion last year," he said, adding that at the rate, the nation could go bankrupt by 2019 with debts totalling RM1.158 trillion.

Meanwhile, the proposed subsidy cuts received mixed reaction from members of the public who attended the Subsidy Rationalisation Lab Open Day here.

"Subsidy is a financial aid given by the government to help the people reduce their cost of living, but it also has a negative impact on the country's economy," said Mardiah Madun.

Hence, the 26-year-old clerk said it was vital for the people to be educated on the negative repercussions awaiting the country if the subsidies were not cut.

Nirfadilah Azit, 32, on the other hand, said that despite being an acceptable proposal, the implementation of the move should be done in stages so that the people wouldn't be too shocked with drastic changes.

"If it is implemented simultaneously, I'm afraid the people will not be able to accept it and thus, blame the government," she said.

Meanwhile, a mechanic, Halim Salim, 36, described the proposal as a way to inculcate the spirit of being independent among the people.

"With the subsidy, the people have become too dependent on the government. Now that the government wants to cut the subsidies, maybe we all can learn to be more independent," he said.

For a civil servant who wanted to be known only as Mimi, 46, the subsidy cuts would give a major impact especially to the middle-income group.

"I think it should be further reviewed," she said.

-- BERNAMA