LETTER | Ismail Sabri, removing subsidies is not the answer

LETTER | The government seems to be extremely concerned with the growing amount of subsidies given to the people. It keeps coming out with all sorts of excuses on why the subsidy is high.

The government seems to have a one-track mind in addressing the nation's finances by giving targeted financial assistance to the B40 group and at the same time removing the subsidy.

A subsidy is a norm in every country in the world. It goes with the economic health of the country.

It is unfair to develop a subsidy programme for the B40 group only because the other 60 percent of the population are Malaysians and they are the ones that pay taxes.

Removing subsidies has far-reaching economic consequences on the population and the nation's economic competitiveness.

The solution to subsidy and which is fair is to use taxation instruments. A new tax bracket can be created for the super-rich including the royal families, businesses that have bumper profits and companies that make more than a billion dollars in profits.

Targeted and segmented GST being a consumption tax must be introduced and must not be politicised. Petronas is expected to give a bumper dividend and this will help.

I believe the application of taxes as a revenue tool, will bring additional revenue to support the additional subsidy cost.

Most importantly, we must encourage more people to go into business. Malaysia needs to regain its lost competitive edge.

More businesses mean more tax revenues for the government. We need the population to go into the agriculture business quickly to reduce food imports.

Government is bloated

One of the major problems with subsidy especially in the agriculture sector is that it is not production-driven and the mechanism of subsidy is inefficient and costly. This needs to be revisited and improved.

We believe, that at least 10-30 percent of the subsidy cost can be reduced if the programme is run efficiently.

Similarly, the government is bloated, top-heavy and needs serious trimming and it must manage its expenses properly.

We do hope you will consider our suggestions given above.

Removing subsidies is not the answer.

Helping the B40 with targeted financial assistance only looks good on paper but in a practical sense, the economic impact will spiral into a disaster with no U-turn.

Haven’t we seen enough since we gain independence?

The writer is the chairperson of Victims Malaysia.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.