As subsidies balloon, BN eyes cuts but foes expect snap polls
By Melissa Chi, The Malaysian Insider
KUALA LUMPUR, May 17 — With the national subsidy bill expected to top RM20 billion this year, opposition leaders are bracing for snap polls before the ruling Barisan Nasional (BN) makes inevitable cuts that could prove unpopular among voters.
Several senior BN leaders had signalled the inevitability of price hikes yesterday, hours before the Najib administration announced it will cut the diesel super subsidy for nine categories of commercial vehicles from June 1.
At the same time, the government kept its January promise and abolished toll charges in the East-West Link between Cheras and Petaling Jaya, a key highway in the Klang Valley from midnight this morning.
Rural and Regional Development Minister Datuk Seri Mohd Shafie Apdal told The Malaysian Insider that it is important for the government to balance between cutting the country’s deficit and, at the same time, not dumping the burden on the citizens.
“How can the nation shoulder the burden? We are managing quite well despite the economic turmoil,” he said.
As for subsidy cuts, Shafie said it will depend on the advisory council under the Price Control and Anti-Profiteering Act 2010 to decide.
The Umno vice-president emphasised that this is a very complex and delicate issue.
“It is not as simple as it entails a lot of complexity and we have to manage it properly. So every one of us, irrespective of the government, has to play a part to ensure the bigger picture will benefit us, a nation as a whole,” he said, adding BN was doing its best as no government wants to lose power, or bring the country into a deeper deficit.
“When you micromanage the economy, for example through subsidies, it will benefit the public to a certain extent but it also benefits smugglers. It’s not a question of winning the elections but the nation has to pay for it in the future, so we’re being a responsible government,” Shafie said.
Deputy Prime Minister Tan Sri Muhyiddin Yassin signalled the inevitability of price hikes when he announced yesterday the subsidy burden was expected to double this year from RM10.32 billion to RM20.58 billion, with RM18 billion for petroleum-related sectors.
The Umno deputy president said the country could no longer maintain the current subsidies, adding the government was trying to reduce subsidy costs like the increase in price of sugar and that it was doing it in stages.
DAP publicity chief Tony Pua told The Malaysian Insider that he predicts the prime minister will call for earlier polls as global commodity prices go up.
“July, if it’s a surprise one, but a possible one will be in November.
“They are handling it terribly. I think there are a lot of place where expenditures can be cut, for example, restructuring the IPP (independent power producer) contracts. Out of the RM20 billion subsidy bill, the deputy prime minister should clarify how much are for the IPPs? How much for sugar?” he said.
“I think they should handle the biggest impact to deficit — IPP, the need to curb smuggling activities — which takes up a large portion of the subsidy.
“The problem has been identified by Pemandu but no action has been taken. The government only cuts those subsidies that affect the man on the street,” Pua said.
Minister of Domestic Trade, Co-operatives and Consumerism Datuk Seri Ismail Sabri Yaakob said yesterday that a price increase for RON 95 was possible, and that the people should be prepared to face it.
PAS Shah Alam MP Khalid Samad echoed Pua’s prediction for early polls in July, but said subsidy cuts were not the only factor.
