In an effort to save Malaysia from becoming bankrupt within the decade, Datuk Seri Idris Jala today (May 27) proposed several major steps to better manage the government’s growing spending on subsidies.
But Idris also recommended handing cash rebates directly to consumers to offset the burden on the poor, similar to the practice mooted by the former domestic trade minister Datuk Shahrir Samad during the Abdullah administration.
Big savings could be seen only if the government focused on the “big ticket items”, stressed the minister in the Prime Minister’s Department heading the Government Transformation Plan (GTP).
He said it would cutting down on subsidies would save the government RM103 billion over the next five
“This is the most unpopular decision the government has to make since Independence,” Idris admitted today at a public forum here to present ideas to better manage the subsidy system.
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It found that the diesel price hike of 15% or 21 sen would result in express bus fares increasing by one sen to 1.5 sen a kilometre.
The same quantum of increase would raise stage bus fares by 1.4 sen to 50 sen a kilometre, and school bus fares by one sen to 58 sen a kilometre.
For cooking gas or liquefied petroleum gas, the lab proposed a 10% increase by the middle of the year, followed by a 20% increase every year.
The lab projected that an increase of 15% in the price of gas would raise prices of food such as roti canai, nasi lemak, teh tarik and mee goreng by only one to four sen.
Metzelder says: As most Malaysians that are polled for their opinion about the subsidy cut agreed, which includes me.
I totally understand about the essential needs for it take place. Our subsidies structure is different unlike others in the world with comprehensive coverage, that even PR's and foreigners gained benefit from us.