“Ideas and Refsa are shocked that the federal government subsidy bill for 2012 is now expected to hit RM42 billion, a massive RM9 billion or 27 percent above the RM33 billion originally forecast for the year.
“Prime Minister Najib Razak’s administration has quadrupled subsidies from RM10 billon in 2007 to over RM42 billion today. “The massive 4-fold increase has clearly been wasteful,” said Ideas CEO Wan Saiful and Refsa executive director Teh Chi-Chang in a joint statement today.
“Properly channeled, the RM42 billion of subsidies in 2012 is sufficient to give RM1,560 per month to the poorest one third of Malaysian households.
“This would more than double their current incomes which average just RM1,500 per month, and is in stark contrast to the RM500 one-off BR1M payments, which are still necessary despite the huge subsidies elsewhere,” said the duo.
They criticised the blanket subsidies for petrol and sugar as “encouraging excessive and wasteful consumption” and discouraging investments in improving productivity and efficiency.
The subsidies, they said, also benefit the upper class more than the poor.
“In this respect, we are disappointed Pakatan Rakyat in its Belanjawan Pakatan Rakyat 2013 document also skirts the issue of subsidy reform. Pakatan Rakyat calls for total subsidies to be reduced in 2013, but does not provide substantive discussion of the issue,” they added.
Noting that subsidies represent a “major element” in the budgets of both coalitions, Wan Saiful and Teh called on both to “seriously address the challenge of subsidy dependency in their respective economic policies”.
In today’s budget speech, Najib announced a 20 sen decrease in sugar subsidies, and a spending of RM1.5 billion on cooking oil subsidies.
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