Economists believe the existing subsidy scheme, especially that for pe trol, create economic distortion s, con tribute to excess consump tion and levy an unaccoun ted for and unackno wledg ed bur den on s ocie ty.
THE call for Malaysia to expedite structural reforms to rebalance its economy and strengthen its public finances has grown increasingly louder in recent weeks following Fitch Ratings’ downgrade of the country’s credit outlook from “stable” to “negative”.
According to economists, addressing the country’s long-running deficit and high public debt is not a rocket science. The right approach, they point out, has to be two-pronged: one is by cutting down on expenditure through subsidy rationalisation and stemming of wastage and inefficiencies, while the other is by expanding revenue base through tax reforms to reduce the nation’s reliance on petroleum-derived revenue.
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