Be consistent with subsidy plans or risk eroding investor confidence, says Shahril

 

Former Umno information chief Shahril Hamdan said investors will feel unsettled if there are conflicting messages about the government’s economic management.  (Facebook pic)

PETALING JAYA: The government’s mixed messages over plans for targeted fuel subsidies will undermine investor confidence, says former Umno information chief Shahril Hamdan.

Speaking in the latest episode of the Keluar Sekejap podcast, Shahril said conflicting messages about the government’s economic management can be unsettling for investors.

“The economy minister (Rafizi Ramli) has already given more than a hint. He rolled out the central database hub (Padu) and recently said subsidy cuts would happen soon,” he said.

“When the prime minister (Anwar Ibrahim), who is his boss, goes to an international forum, a contradictory message is given.”

Podcast co-host Khairy Jamaluddin echoed this sentiment, saying that Anwar should not be “cagey” about subsidy rationalisation since Rafizi had already signalled the market about the planned sequence, starting with diesel and moving on to petrol.

“He doesn’t need to specify when, but he should have reiterated that it will be done this year or by the fourth quarter at the latest to signal that it’s coming,” the former health minister said.

On Jan 19, Rafizi said the mechanism for distributing targeted subsidies could be implemented as early as the second quarter of this year.

Rafizi said his team is using the first quarter to process data obtained from Padu which was launched on Jan 2 to ensure the efficient delivery of targeted subsidies.

However, in an interview with Bloomberg on Tuesday, Anwar reiterated the need to cut wasteful spending, including reducing excess subsidies, but stopped short of committing to a timeline for ending fuel subsidies.

Malaysia currently absorbs much of its population’s cost for fuel and cooking oil, a measure estimated to have cost RM81 billion last year.

Anwar aims to replace broad subsidies with targeted assistance this year to help reduce the 2024 budget deficit to 4.3% of the gross domestic product (GDP) from 5% in 2023.

Early in his term, Anwar pledged to improve Malaysia’s fiscal position and reduce government debt, which is currently over 60% of GDP. - FMT