THE GOVERNMENT needs to spend RM77.7 bil in order to provide subsidies and aid this year amid increasing inflation and rising prices of goods, Parliament was told.
The increase of close to RM50 bil from previous allocations in this year’s budget was attributed to increased inflation, global commodity prices and food costs as a result of economic uncertainties and international geopolitical tensions.
“This situation has had an impact on the economic recovery of the country, besides putting pressure on the rakyat as it involves an increase in costs of living,” Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz said yesterday.
In a written reply to Semporna MP Datuk Seri Mohd Shafie Apdal, Tengku Zafrul said the Government introduced price controls and subsidies for goods to address these issues and reduce the impact of inflation.
However, he noted that Government spending increased exponentially by providing these subsidies and aids, especially for subsidies involving fuel, cooking oil, electricity, chicken and eggs.
“Government expenses for aid and subsidies for 2022 are projected to reach RM77.7 bil, compared to the previous allocation of RM31 bil that was provided for in Budget 2022.
“It is also expected that additional revenue relating to (the sale of) petroleum products and commodities will not be enough to cover the increase in aid and subsidy spending,” he added.
Tengku Zafrul, who earlier this week said Malaysia is stable and not at risk of going bankrupt, said this is why the Government is taking efforts to control development expenditure and cut costs wherever necessary.
“Optimising public expenditure”
Tengku Zafrul’s remarks comes on the back of several cost-cutting measures for civil servants and Government spending, as entailed in the Malaysia Treasury Circular – Guidelines on Public Expenditure Savings issued on July 14.
The guidelines, to be implemented in all ministries, Government departments and agencies, aim at optimising public expenditure and reducing at least 5% of the Government’s 2022 operating expenditure for all ministries.
Among key measures announced is a limit on officials travelling with high-ranking government officials, including ministers and deputy ministers, during overseas travels, and a cap on the number of times these officials can travel overseas as well.
In tandem with the guidelines, the Government will also review all procurement processes for projects that have yet to start, with priority given to projects that provide an immediate impact on the well-being of the people.
As of now, no such projects have been delayed or cancelled, Tengku Zafrul said in response to a supplementary question by Shafie, while critical projects for the economy and rakyat will continue.
“And even if a project’s implementation is delayed, preliminary work such as design preparations, land acquisitions and procurement planning will still carry on,” he said.
Tengku Zafrul also said the Government will review and re-evaluate the effectiveness of each subsidy and incentive programme it has implemented in order to ensure optimal Government spending.
Savings from this will then be allocated to welfare programmes for the people, he said. – July 21, 2022
