The unkindest cut for the poor

By Thomas Lee, MySinchew

The decision by the federal government to increase the prices of sugar, gas and petrol as the first step of its gradual subsidy rationalisation programme is sure to irk the people, especially those in the low-income group.

There will certainly be massive bitter resentment and anger among the people, especially when the Ramadan month cum Hari Raya Puasa, and the month-long Hungry Ghost Festival, the Mid-Autumn or Mooncake Festival, and the Kew Ong Yah (Nine Emperor-Gods) Festival are just around the corner. Many Chinese also hold their weddings during the auspicious Mid-Autumn Festival period.

Obviously, the price-increase move will cause a domino effect on the economy, sparking a rise in prices of other goods and services, especially the food and transportation sectors.

The move is also expected to cause some major political repercussions for the Barisan Nasional, especially with the impending Sarawak state election, which must be held before the end of the year, and a possible general election early next year.

The timing of the price increase announcement, just a few hours after Parliament adjourned its latest sitting, has also cast uncomplimentary aspersion on the Najib administration for wanting to avoid an open debate by
the country’s lawmakers on such a vital issue.

The federal government has described the cuts as part of a difficult but bold decision to reduce fiscal deficit, and said that it would still have to spend RM7.8 billion on fuel and sugar subsidies this year.

According to a statement from the Prime Minister’s Office, the subsidy rationalisation would allow the federal government to reduce its expenditure by more than RM750 million this year.

The so-called savings through the cut in subsidies will surely become a point of contention as the people are upset that they have to suffer the increasing cost of living while the government spends hundreds of millions on what they perceive as non-essential things, such as the mega building projects and the purchases of defence equipment.

There had also been massive wastage of public funds, such as the Port Klang Free Zone (PKFZ) fiasco, which arose after the cost to develop the massive 400-hectare integrated cargo distribution hub spiralled from RM1.9 billion to RM4.6 billion.

Then there is the mega purchase of two France-made Scorpene submarines. According to figures supplied to an MP in Parliament by Defense Minister Ahmad Zahid Hamidi, total costs, excluding annual maintenance, works out to 1.34 billion euros or RM6.7 billion. This breaks down to 969 million euros for the two submarines, 219 million euros for missiles, 38 million euros for miscellaneous equipment and 114 million euros for commission paid to the middle-man company Perimekar. Maintenance fees were originally agreed at RM600 million for six years or RM100 million per year. However, this has been increased to RM270 million per year.

Sure, the people will support the government in what it has described as the “long-needed” economic reforms to help the country maintain the strong growth it had achieved to become a developed and high-income nation.

But the people also want responsibility, competency, accountability, transparency, and authenticity in the Barisan Nasional government’s stewardship of the hard-earned tax money they contribute to the nation’s coffer.