MCA has urged Economy Minister Rafizi Ramli to refrain from making announcements regarding the government’s intention to reduce or abolish fuel subsidies without providing accompanying details on the implementation process.
According to the party’s deputy secretary-general Datuk Dr Pamela Yong, such actions only serve to instigate stress and panic within both the public and the economy, thereby undermining market confidence.
“In light of Rafizi’s reiterated assertions regarding the government’s intention to slash fuel subsidies this year, we implore the government to adopt a more professional approach by furnishing comprehensive details on the proposed measures,” she said in a statement on Thursday (April 18).
“This should encompass the implementation mechanism, methodology for identifying target groups, and the sectors that will be impacted.”
Yong said if the government is using the Central Database Hub (PADU) as the data foundation for reducing or abolishing fuel subsidies, then there will be significant doubts about whether the measures can be effectively implemented and truly benefit the people.
“As of March 31, only one-third of the population have registered with PADU. Coupled with the fact that the Sarawak and Sabah governments have expressed their non-support, if the government persists in utilising PADU as the foundation for reducing or abolishing subsidies, we can anticipate yet another catastrophe,” she reckoned.
“Two-thirds of the population, many of whom rely on the subsidies, will face substantial burdens if they lose access to them, and the government’s objective of rationalising subsidies will not be achieved.”
Yong pointed out that another pressing concern is whether this is the right year to reduce or abolish fuel subsidies.
“Observing the broader market context, where the government is introducing new taxes, augmenting and broadening the Sales and Services Tax (SST), escalating water and electricity tariffs, and implementing the electronic invoice system in August, prices are escalating incessantly, and many small businesses have shuttered their doors,” she noted.
“Both businesses and consumers are already grappling with these challenges, and the ramifications of further subsidy reductions are unfathomable.”
Urging the Economy Ministry to “learn from past mistakes” and refrain from repeating the failures of previous policies that caused market panic due to the lack of clarity, Yong said the government should provide clear explanations to the people and seriously consider the impact of cancelling various subsidies on people’s livelihood and the economy.
On Wednesday (April 17) Rafizi had reportedly insisted that Malaysia will continue to reduce petrol subsidies this year to reduce its fiscal deficit.
Financial news Bloomberg reported him saying that the government is currently on track to concentrate its aid on helping the poor.
“We are sticking to it,” he said in an interview at Putrajaya, adding that the government must “manage the sequence” of the reduction, in light of the possibility of inflation increasing even before subsidy reductions are put into effect.
The Pandan MP further said that the country intended to phase out blanket subsidies for RON95 fuel, which is the most widely used and economical gasoline variant, which constituted the majority of the RM81 bil spent on subsidies last year.
“In order to reach the fiscal target of 4.3%, a certain timeline has to be abided. Otherwise, the dollars and cents will be off,” Rafizi reportedly said. – April 18, 2024
Main pic credit: The Star
