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Will the Budget address people's woes?

  • In the face of negativities arising from plummeting crude prices and ringgit depreciation, Malaysians are increasingly concerned whether the 2017 Budget will introduce economic policies that will benefit the people, such as lower individual income tax rate, GST, housing strategy and assistance for the lower income group.

Translated by DOMINIC LOH
Sin Chew Daily

Due to readjustment in government subsidies, prices of cooking oil will be increased by up to 15% over two stages beginning next month.

Cooking oil is a daily necessity, and the sudden price hike will have a very serious bearing on the day-to-day lives of Malaysians. It is anticipated that a new round of inflation will be initiated very soon, putting more pressure on many people.

As the prime minister cum finance minister Datuk Seri Najib Tun Razak is preparing to table the 2017 Budget at the Dewan Rakyat on Friday, Malaysians are yearning for more people-friendly policies that will help ease their financial burdens.

The government started to rationalize the subsidy mechanism several years ago, with subsidies for daily necessities taking turns to be scrapped. For instance, the RM0.34/kg white sugar subsidy was abolished in 2013, followed by the managed floatation of RON95 and diesel prices in 2014, the removal of ST white rice subsidy last year that saw the price of 10kg pack rising in price from RM17.50 to RM23, and the cut in electrical tariff and flour subsidies earlier this year.

The subsidy rationalization measure has triggered a new round of inflationary pressure, including higher public transport fares that have significantly raised the living expenses of many people. The most recent cut in cooking oil subsidy is expected to add to the misery of the rakyat.

As a matter of fact, subsidy rationalization is a prevailing trend that will ensure the country's precious resources are not squandered and are channeled to more productive sectors that will bring long-term benefits to the country, including education, infrastructure and public amenities, among others. It is a necessary albeit painful step the government must take in order to revitalize the national economy.

Nevertheless, due to the already very heavy burden upon the shoulders of average Malaysians in recent years, subsidy rationalization ought to be carried out gradually so as not to excessively burden the people.

Take the cooking oil subsidy for example, if the government would reduce the subsidy by only 3% this year, and additional 5% next year instead of a single one-off drastic cut, the impact will be remarkably subdued.

In the face of negativities arising from plummeting crude prices and ringgit depreciation, Malaysians are increasingly concerned whether the 2017 Budget will introduce economic policies that will benefit the people, such as lower individual income tax rate, GST, housing strategy and assistance for the lower income group.

We feel that after the various subsidies have been removed, the government should be able to divert more resources to help the lower income group, providing them with more affordable housing options or increasing the quantum of BR1M in a bid to lessen their burden.

In light of the sluggish international markets, it is absolutely essential that the government expand domestic demands to spearhead the development of national economy. To boost domestic demands, the government must strive to increase the incomes of the people.

Consequently, following the gradual phasing out of subsidies, the government must provide more benefits and protection for the people in the coming Budget in order to mitigate the burden of the people while facilitating the expansion of domestic demands.

Indeed, subsidy rationalization is a positive step towards the country's long-term development, but the government must also improve management efficiency to stamp out corruption and wastage of public funds. It is imperative that the government step up its effort to address this issue in order to really enhance the living standard of Malaysians and put the country back on the right track of growth.

 

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