Subsidise food not fuel, Guan Eng tells Najib

KUALA LUMPUR, June 29 The Najib administration should subsidise food instead of fuel to help middle and lower incomes groups burdened by the rising cost of essential goods, DAP secretary-general Lim Guan Eng has said.

He said he was shocked to discover that Putrajaya has allocated RM15.9 billion this year to subsidise liquid petroleum gas (LPG), diesel and petrol for the benefit of independent power producers (IPPs) but only RM1.5 billion on subsidies for necessities like rice, sugar and flour.

Why doesnt the federal government cut subsidies for liquid petroleum gas, diesel and petrol, and return subsidies that can truly lighten the burden of people in middle and lower income groups without jeopardising the nations financial position? he said in a statement today.

A government with the peoples interest at heart should reduce the burden on the people instead of helping cronies achieve success. BN (Barisan Nasional) appears to be doing the opposite.

Lim (picture), who is also Penang chief minister, said the subsidy schedule revealed by the finance minister in Parliament recently showed that while fuel subsidies went up from RM9.6 billion in 2010 to RM15.9 billion this year, welfare subsidy dropped from RM2.4 billion to RM1.9 billion in the same period.

Rice and sugar subsidies were also cut from RM1.9 billion last year to RM1.6 billion while incentives for farmers and fisherman were similarly reduced from RM524 million to RM401 million, he added.

It is clear that... subsidies for the common man have been cut more than subsidies for corporations, he said.

This suggests that the federal government is more concerned about big, rich companies than poor folk.

Since taking office in 2009, Prime Minister Datuk Seri Najib Razak has pledged to cut subsidies and widen the tax base to trim a fiscal deficit which hit a 20-year high of 7 per cent of GDP in 2009! .

The deficit was at 5.6 per cent in 2010 and is officially targeted to be 5.4 per cent this year, which analysts say will be easily met target if prices for fuel and electricity are raised, even incrementally.

The government has set aside RM23.7 billion this year, or 14.6 per cent of its budget, to pay for all federal subsidies.