Member of the Council of Eminent Persons (CEP) Tun Daim Zainuddin has said that a proposal on fuel subsidy reforms will be presented to prime minister Tun Dr Mahathir Mohamad as soon as this week, according to an interview by Bernama.
The former finance minister said that the council has conducted over 200 meetings with various heads of agencies, companies and individuals since it was set up a month ago, in order to study issues such as fuel subsidies, the removal of toll charges and the abolition of the goods and services tax (GST).
He added that the CEP has also made numerous meetings with relevant stakeholders to figure out the right way to reform the fuel subsidies before deciding on the proposal. While he declined to elaborate further, he did confirm that the subsidies will be targeted at specific groups.
Daim also said that thew council was fully aware of the financial impact on the market that will come from the removal of toll charges, part of the Pakatan Harapan’s manifesto for the 14th general elections. “While we want to reduce the toll for the rakyat, we are also aware of the impact on the market if tolls are abolished immediately,” he said.
The CEP is currently exploring various options on dealing with the issue, guided on the principle that the decision made will be phased and structured. This, Daim said, will ensure that the end outcome will be fair to all stakeholders.
“So far, the feedback from the rakyat is very encouraging. No need to abolish toll immediately, I mean they understand. They know it was mentioned in the manifesto, now that reality has come in, they understand the financial position and the problem. We have worked all these things out. We will try to do in such a way that it balances everything. The market will be happy, the owners are happy and the consumers are happy.”
Daim added that the decision to cancel and review mega-projects did not mean that the government was shifting the focus of the economy, but was driven by the fact that some of the projects simply did not make any sense – particularly the MRT projects that cost a lot of money. “Just compensation for the land is huge. And it’s only in Kuala Lumpur, what about other places?” he said.
He noted that the economy is still largely driven by domestic demand, with private consumption and spending accounting for 54% of the overall gross domestic product (GDP). Daim explained that as such, the government was only being fiscally responsible in expenditure to manage the country’s fiscal debt position. “Any projects that benefit the rakyat should be continued, but we have to review all projects to make sure that they are cost effective and no hanky panky is involved,” he said,
Daim also mentioned that he was confident that revenue from the new sales and services tax (SST) and savings from rationalising operational expenses can fusion the possible shortfall in revenue from abolishing GST, adding that the government was also undergoing reforms to minimise wastage and leakages.
“That RM43 billion (revenue from GST) is excluding the refunds. In the ’80s I wanted the GST. Other countries also have GST but the money collected goes back to the rakyat. Here it only went to BR1M. That is why the rakyat is upset. Here GST is charged from the time before you were born until you die whereas, in the western country, GST take care of you from the time you were born until you die,” he said.