PAS: Subsidy cuts mean public footing BN’s bill

Najib’s reference to fuel subsidies as “opium” was criticised by Mahfuz. — file pic

KUALA LUMPUR, May 22 — PAS accused the Najib administration today of attempting to shift its responsibility for the ballooning fiscal deficit to the public by slashing subsidies to some essential goods

Party vice president Datuk Mahfuz Omar said Putrajaya was unable to find ways to cut its own expenditure and the public was now “paying a subsidy to the government to pay off its debts.”

“This is a weak government that cannot reduce the deficit without burdening the public. Now the government’s deficit has become the people’s deficit. The government is now taking money from our pockets to pay for the deficit,” he told a press conference at the Islamist party’s headquarters today.

Although Datuk Seri Najib Razak is expected to call for a snap election this year, the Barisan Nasional (BN) government has said it will push ahead with cuts to a subsidy bill that would otherwise double to RM21 billion this year.

Malaysia’s deficit grew to a 22-year high of seven per cent of GDP in 2009 as the government unveiled stimulus packages worth RM67 billion in 2008 and 2009 to help resuscitate growth during the global slump.

The prime minister has said subsidies must be cut gradually in order to bring the budget deficit under control. The government plans to reduce the deficit from 5.6 per cent to 5.4 per cent this year and down to 2.8 per cent by 2015.

This comes as inflation accelerates with the consumer price index rising by three per cent in March — the fastest rate in nearly two years — and prices of non-alcoholic foodstuff increasing by 4.7 per cent.

Analysts and politicians believe economic woes will be the biggest problem for the ruling coalition if the vote is called.

According to a Bloomberg report last month, surging fuel prices and unhappiness over the implementation of race-based policies contributed to the ruling coalition losing control of five of 13 states to Pakatan Rakyat in Election 2008, where it also ceded a record 82 out of 222 seats in Parliament.

Today, Mahfuz also criticised Najib for referring to subsidies as “opium” when speaking overseas.

“He is telling the international community that Malaysians are addicted to subsidies. This is an insult and he should withdraw his statement and apologise,” he said.

The Pokok Sena MP added that subsidies for essential goods like fuel and sugar should not be seen as distortions to the market but as “the government’s responsibility to lighten the burden to the public.”

“It is a mechanism for wealth distribution. The government should reduce its own spending rather than strip away the right of the public,” he said.

Deputy Finance Minister Senator Datuk Donald Lim said yesterday the government has ordered all departments to cut costs in view of rising prices.