PUTRAJAYA: The Government is expected to fork out RM20.58bil in subsidies this year, with RM18bil to subsidise the rising cost of petroleum-related products.
The projected subsidy is double the RM10.32bil spent on subsidy last year, Deputy Prime Minister Tan Sri Muhyiddin Yassin said.
He said the expected hike was due to the spiralling price of petroleum on the global market, which resulted in increases of other raw materials for goods and services.
Muhyiddin said the Government could not drastically reduce the subsidy bill without burdening the rakyat but said that subsidy on various products would be reviewed continuously and reduced where needed.
He added that the Government could not guarantee that prices of goods and services would not increase in the near future.
“We are subsidising but we cannot sustain subsidies at the same amount. So we are trying to reduce subsidy costs, like in the price of sugar, in stages,” he said after chairing the inaugural Cabinet committee meeting on supply and price yesterday.
Muhyiddin said the reduction of subsidies was in tandem with efforts to raise local food supply output, specifically that of perishables like fruit and vegetable, livestock meats and aquaculture products.
“The Agriculture Ministry will adopt strategies to accelerate the supply of food in the country by helping farmers and fishermen but we need an increased private sector contribution as well,” he said.
He added that the Government would help producers with infrastructure development and incentive grants to bolster food supply.
Muhyiddin also discounted any plan by the Government to control or limit food exports and imports as a measure of controlling inflation and ensuring Malaysia's food security.
“If the producers can get a good price by exporting, the Government cannot stop them. We also have to look at an open market where supply and demand are determining factors which we cannot control.
He added that the Competition Commission will ensure fair business practices starting next January.