MALAYSIA is reviewing its government subsidies programme, aiming to direct money toward low-income groups, the country’s new Prime Minister Anwar Ibrahim said on Sunday (Nov 27), prioritising the rising cost of living as he takes office at a time of slowing growth.
Government agencies have two weeks to review the implications of narrowing the subsidies, he told a news conference.
Malaysia offers subsidies to all citizens, with fuel and cooking oil accounting for the biggest expense. It also subsidises electricity, sugar and flour.
“Subsidies must be targeted, otherwise those subsidies are enjoyed not just by the low income group but also the wealthy,” said Anwar, who emerged as Malaysia’s 10th prime minister after a closely fought election on Nov 19.
Other incentives will be considered for industries that no longer benefit from subsidies, he added.
Anwar is carrying through the stance of the previous administration, which last month proposed a smaller budget, cutting subsidies due to rising commodities costs and the resulting impact on government coffers.
Malaysia is estimated to spend a record RM77.7 billion (S$23.9 billion) this year on subsidies.
Anwar said that he will discuss cabinet appointments with his coalition partners in the next few days.
The 75-year-old was sworn in on Nov 24, capping a three-decade political journey from protege of veteran leader Mahathir Mohamad to protest leader, prisoner convicted of sodomy and opposition figurehead.
Investors have cheered his appointment, hoping that Anwar would bring stability after political uncertainty that saw three prime ministers in as many years.
The focus is on the new government’s policy direction and cabinet appointments.
Anwar stressed that his Cabinet size would be smaller than previous administrations to put an end to what he described as “extravagance”.
“I don’t want to continue with this extravagant manner of appointing ministers as a form of reward,” he said at the news conference on Sunday.
“Of course, we can consider one or two positions as advisers where it is absolutely necessary but it shouldn’t be seen as rewarding the political masters in order to gain support.”
Source: https://www.businesstimes.com.sg/international/asean/malaysia-pm-anwar-eyes-targeted-subsidies-low-income-groups