Thursday 26 May 2011

DAP MP: Cut civil service, revamp APs to keep subsidies

KUALA LUMPUR, May 26 — DAP MP Nga Kor Ming today proposed revamping car import permits, cutting the number of civil servants and slashing power production subsidies to maintain low prices for fuel, gas and sugar.

He claimed the three measures could save the country over RM40 billion annually and reduce its subsidy burden.

The Taiping MP, who is also DAP’s national assistant treasurer, said by implementing the measures, Malaysians would still be able to enjoy subsidies for daily essentials like fuel, gas and sugar.

Nga said the government should employ an open tender system for the issuance of Approved Permits (APs) for vehicle imports.

“The government currently issues 100,000 APs every year. The market price for one AP is RM40,000. But presently, the APs are sold to only 78 companies at a rate of RM10,000 each.

“With an open tender system, fair participation is encouraged and companies will purchase APs at the market rate. With the simple stroke of a pen, this could [earn] the country up to RM4 billion annually,” he said.
Nga said a review of gas subsidies to independent power producers (IPPs) would also help save the country up to RM22 billion annually.

“Subsidies to the IPPs, according to the contract now, is worth RM22 billion. Petronas sells one barrel to the IPPs at only RM10 each, which is a quarter of the actual cost of RM40, which means they are being subsidised RM30 for each barrel,” he said.

Nga said the IPP agreements should be reviewed and should not be extended as the concessionaires have already “made their money and paid off their investments”.

He added that the “lopsided” IPP agreements had also caused Malaysia to have a power reserve of 52 per cent, although the international benchmark stands at just 10 per cent.

“The reserve is for emergency use like earthquakes or tsunami so it is ridiculous beyond imagination why a developing country like Malaysia needs a 52 per cent surplus, one of the highest in the world,” he said.
Nga also said the government could slash its administrative expenditure of RM167 billion by trimming its bloated civil service.

Malaysia is said to have the highest civil servants-to-population ratio in the Asia Pacific at 4.68 per cent, topping Indonesia’s 1.79 per cent, South Korea’s 1.85 per cent and Thailand’s 2.06 per cent.

“Japan has a 120 million population and Malaysia merely 27 million but our civil service is the same size. They have just 16 ministers in their Cabinet while we have 28 ministers and more than 40 deputies.

“So if you cut the expenses by just 10 per cent, this could save us RM16.7 billion annually,” he said.

Nga concluded that the total annual savings of RM42.7 billion from his suggestions could then be used to foot the country’s subsidy bill.

Prime Minister Datuk Seri Najib Razak said recently the government would have to reduce the subsidy “opium” to the people as Malaysia’s burgeoning subsidy bill was expected to double from RM10.32 billion to RM20.58 billion.

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