Rationalise fuel subsidy gradually - former deputy minister

The government should look at a more updated approach to rationalise the subsidy programme and it needs to be done in a gradual manner to be successful, said former deputy minister Ong Kian Ming.

Ong, who held the international trade and industry portfolio, said the use of savings from the rationalisation process also needs to be communicated well to the public to avoid backlash.

“It should be gradual, not a sudden increase like it was done previously. For example, the government could increase it by 10 sen monthly so the market can adjust.

“Secondly, the government should announce a series of measures whereby the amount it saved from the fuel subsidy can be spent in ways that are very easy to understand by the people and also impactful to them.

“For example, part of the savings can be allocated to the Health Ministry so that some of the contract doctors can be given permanent postings, reduced queues to receive treatment, expansion of certain wings in certain crowded hospitals, and more,” he said

The former Bangi MP was speaking to reporters on the sidelines of the launch of the World Bank report entitled “Building Malaysia’s Resilience: Lessons from Covid-19’s Economic Impacts and Policy Responses”.

Former deputy minister Ong Kian Ming

He said the allocations could also be channelled to increase public transportation spending and part of it can go into increasing the allocation for cash assistance.

He was of the view that taking away the subsidy and giving back to the people directly in the form of cash transfers or some sort of card which they can use to buy fuel is not very workable because the system will be more prone to leakages.

Commenting on the findings of the World Bank report, he said during the pandemic, it was learned that there is a need to have a whole of government approach to fight the crisis, and also to address some of the longer-term issues.

“I think it is very important for the federal government to work together with the state government as well as the local authorities. And this includes states like Kelantan, Terengganu, and Kedah that are currently being governed by the opposition,” he said.

Important to consolidate data

The second thing the DAP leader highlighted was the importance of data that the government collected during the Covid period to be consolidated and used in strategic ways including for better targeting of assistance.

“There were a lot of data gathered by the Ministry of Finance (MoF) and other ministries and government agencies in terms of helping companies as well as individuals.

“It is very important for this data to be able to be consolidated so that we can use it for a better targeting mechanism to help those who need assistance,” he said.

He said now is also a good time for the MoF to undergo some audit process to find out where the money was spent, and other areas where the money was not that well targeted.

On the need to have alternative financing made available for small businesses which face challenges to get financing from banks to help them speed up the recovery from the pandemic, he opined there is a lot of room for these different kinds of financing mechanisms to kick in.

“So one thing that I am looking forward to is the launch of the New Industrial Master Plan later this month because there will be different financing models that will be discussed and explored that include capital markets, banks, and other platforms,” he added.

- Bernama