Tariff hike necessary to ensure TNB's financial viability

Prime Minister Najib Abdul Razak said the recent electricity tariff hike is necessary to ensure the financial viability of national power utility Tenaga Nasional Berhad (TNB).

"We need to carry out the tariff hike because TNB needs RM6 billion a year for investments.

"If it is not done, the financial viability of TNB will be affected," he told a press conference after the closing of the four-day Umno general assembly in Kuala Lumpur this evening.

However, he stressed that 71 percent of the population are unaffected by the electricity tariff increase, expected to be 15 percent for Peninsular Malaysia, 16.9 percent for Sabah and Sarawak.

Najib added that the recent series of subsidy cuts were "short-term pains" that will benefit the rakyat in the end.

"It is important to have fiscal consolidation. When we are fiscally stronger, we can do much more for the people.

"They have to understand it is the process. There is some short-term pain - not severe pain, just a mild pain - but in the long term it is going to be good for the rakyat," he said.

Swallow the bitter pill

Furthermore, Najib said the government had also expanded the social safety net for the needy, including increase in the BR1M cash aid.

When pointed out that these price increases will hit the middle-class the hardest, Najib acknowledged the problem.

"Yes, but it can't be helped, it can't be helped," he conceded.

Najib added that while the government is asking the rakyat to swallow a bitter pill, it is also taking measures to curb wastage on its part.

"The chief secretary to the government had already made some announcements and action will be taken against those who do not follow instructions in respect of the use of (state) funds.”