‘Do away with crippling cabotage policy’

Jeffrey Kitingan says the cabotage policy and petrol price increase is the main reasons why the cost of living in Sabah and Sarawak has shot up.

KOTA KINABALU: The newly established Special Committee on the cost of living must have the courage to abolish the cabotage policy for Sabah and Sarawak.

Bingkor assemblyman Jeffrey Kitigan said the 30-year old policy is crippling Sabah and Sarawak.

Under the existing policy, only Malaysian-flagged ships are allowed to transport locally-manufactured goods from the peninsula to Sabah.

This means only a small segment, probably less than 200 containers a month, may be coming into the state.

“An immediate action that can be taken is the review and abolish the cabotage policy and do away with the petrol and diesel price increase for the two states,” he said.

The 20-sen hike in petrol and diesel prices would net the federal  government no more than RM300 million from Sabah and Sarawak consumers.

Kitingan said  a waiver of this increase would reduce the burden of Sabahans and Sarawakians tremendously.

“There is no reason why petrol and diesel from Sabah’s oil and gas resources cannot be sold to Sabahans and Sarawakians at a 20-sen discount compared to the prices in the peninsula.

“The RM300 million subsidy is more than covered by the RM26.6 billion and RM45 billion in oil revenues from Sabah and Sarawak respectively in 2014,” he argued.

Kitingan who is also STAR Sabah chairman said the special committee announced by deputy prime minister Muhyuddin Yassin must have both the courage and political will to reverse the decisions that helped cause the ongoing price hikes, .

The new committee will study the higher cost of living in the country following the reversal of decades-long government economic policies.

Kitingan pointed out that the current price hikes of consumer goods and services across the board were triggered by poorly thought out decisions by the federal government regarding fuel prices, followed by raising power tariff which had naturally led to higher transportation cost and cost of production.

This cost incurred by the business operators and service providers was eventually passed on to the consumers, he said.

“The situation was made worse by the fall in the ringgit which was probably caused by the government’s mismanagement of national debt and capital flight due to corruption.

“This will be another reason for higher price of imported goods … and we have not even reached 2015 when the GST (Goods and Service Tax) will be imposed,” he said.

Tackle wastage

“The objective of the 20-sen increase in petrol and diesel prices was supposed to save RM1.1 billion in subsidy savings but it caused an increase in prices.

“Now the federal government announces the setting up of the special committee to evaluate the problems caused by price hikes.

“All these show that the government’s policy decisions were not well thought out before decisions were made,” he said.

An effective solution, he said, would be to tackle wastage, excessive spending and curb rampant corruption in government contracts which would have saved RM9.3 billion in 2014 based on 20% competitive price by way of open tender of the development budget of RM46.5 billion.

“If RM1.1 billion is used to offset the petrol and diesel subsidies, the federal government would still save RM8.2 billion,” he pointed out.