He said the government had consulted Bank Negara on the impact to inflation before proceeding with the subsidy rationalisation programme.
"The answer (from Bank Negara) is that, in short term, as long as the inflation doesn't hit beyond five percent, it is ok for the economy. You keep below five percent for two to three years, then it will come back to around the three percent mark," said Idris.
He was asked about the impact of recent gas subsidy cuts on inflation during a high-tea session with the delegates of Perdana Leadership Foundation CEO Forum 2011 at Kuala Lumpur today.
Net gas importer by 2012
Idris also revealed that peninsula will start to import natural gas at market price starting July 2012 due to dwindling domestic supply.
This will further deplete the government's coffer as the current gas supply is provided by Petronas below market price.
To another question on Goods and Service Tax (GST), Idris insisted that it should be implemented to broaden the government's tax base in order to reduce national debt which stood at an "uncomfortable level" of RM290 billion.
Once GST is introduced, the government would abolish the current sale and service tax of six percent while reducing the corporate and income tax, he said.
"Then, we can find enough money for the poor people," he told some 400 forum participants, adding that a total of 143 countries have similar systems already in place.
Idris, who is the sole cabinet member that is not a member of any party, assured that low income earners would be cushioned from the adverse impacts of GST as staple goods would be exempted or zero-rated from the GST.
4% GST can rake in RM6.3b annually
According to his estimation, the government would gain an additional revenue of RM6.3 billion if GST is introduced at four percent. At a rate of five and seven percent, the revenue are estimated at RM9.7 billion and RM 29 billion respectively.
He revealed that currently only one million out of the 28 million population are paying tax and that the government should not “over burden” this group.
On the 4.6 percent economic growth for the first quarter, Idris explained that this was due to a dip in oil exports as an oil well in Sabah was contaminated with sand.
Oil exports went down by 11.2 percent which led to a lower export growth of 3.7 percent, he said.
"Some people said we did not grow at six percent was because of brain drain. No. It was the sand in the reservoir," he said.
The Najib administration is embarking on an ambitious plan to turn Malaysia into a high-income economy with a per capita income of US$15,000 from the current rate of US$7,000.
This plan is underscored by the New Economic Model and supplemented by the Government Transformation Plan and Economic Transformation Plan, which are two areas under Idris' purview.
Idris also revealed that peninsula will start to import natural gas at market price starting July 2012 due to dwindling domestic supply.
This will further deplete the government's coffer as the current gas supply is provided by Petronas below market price.
To another question on Goods and Service Tax (GST), Idris insisted that it should be implemented to broaden the government's tax base in order to reduce national debt which stood at an "uncomfortable level" of RM290 billion.
Once GST is introduced, the government would abolish the current sale and service tax of six percent while reducing the corporate and income tax, he said.
"Then, we can find enough money for the poor people," he told some 400 forum participants, adding that a total of 143 countries have similar systems already in place.
Idris, who is the sole cabinet member that is not a member of any party, assured that low income earners would be cushioned from the adverse impacts of GST as staple goods would be exempted or zero-rated from the GST.
4% GST can rake in RM6.3b annually
According to his estimation, the government would gain an additional revenue of RM6.3 billion if GST is introduced at four percent. At a rate of five and seven percent, the revenue are estimated at RM9.7 billion and RM 29 billion respectively.
He revealed that currently only one million out of the 28 million population are paying tax and that the government should not “over burden” this group.
On the 4.6 percent economic growth for the first quarter, Idris explained that this was due to a dip in oil exports as an oil well in Sabah was contaminated with sand.
Oil exports went down by 11.2 percent which led to a lower export growth of 3.7 percent, he said.
"Some people said we did not grow at six percent was because of brain drain. No. It was the sand in the reservoir," he said.
The Najib administration is embarking on an ambitious plan to turn Malaysia into a high-income economy with a per capita income of US$15,000 from the current rate of US$7,000.
This plan is underscored by the New Economic Model and supplemented by the Government Transformation Plan and Economic Transformation Plan, which are two areas under Idris' purview.
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