Fuel subsidy cut just the start, ex-NST boss predicts

(MM) – The fuel subsidy cuts announced yesterday are a harbinger of more painful measures to come, according to former New Straits Times (NST) editor-in-chief Datuk A. Kadir Jasin.

Saying that this was the way of elections, with politicians’ many promises made beforehand, the newspaper veteran suggested that the public brace themselves for further hits once the Budget is announced next month.

“Let us not be too surprised if our financial burden does not end here. Wait for Budget 2014 soon,” he wrote on his blog today.

Yesterday, Prime Minister Datuk Seri Najib Razak announced that fuel subsidies for RON95 petrol and diesel will be cut by 20 sen a litre beginning today, in a bid to slash the government’s subsidy bill and trim a chronic budget deficit.

Last week, the government also appeared to signal that a long-delayed goods and services tax (GST) could make its way into the Budget that Najib tables on October 25, after one senior Treasury official said its introduction was now a necessity.

Today, Kadir also said Putrajaya must be transparent in showing how savings from yesterday’s fuel subsidy cut will be used, in order to address the perception of its financial profligacy.

Pointing out that the decision to raise pump prices for both RON95 petrol and diesel will financially burden the public with higher prices elsewhere, Kadir said a failure to inform the people how the money is used will make it appear that the government was simply shifting its problems onto its citizens.

“From the outside, the government appears spendthrift. Travel expenses from Prime Minister Datuk Seri Najib Razak’s trips abroad since five years ago is already RM44.07 million!

“And how much was spent on renovations and repairs at the official residence?” he wrote on his blog today.

The RM44 million amount was revealed in Parliament in July.

Najib yesterday said the subsidy rationalisation exercise will save the government RM1.1 billion this year and possibly RM3.3 billion in 2014 should oil prices remain stable.

Malaysia runs a relatively high government debt of 53 per cent of gross domestic product and has one of Asia’s highest household debt levels.

Ratings agency Fitch cut its outlook on Malaysia’s A-minus sovereign debt to negative from stable in July, citing a lack of reform to tackle rising debt.