KUALA LUMPUR: Subsidies were only reduced for the wealthy, hence it does not affect the majority of the people, says Prime Minister Datuk Seri Anwar Ibrahim.
“We reduced the electricity subsidies for the super rich and the bigger homes, who are in the T20 category. Why are we turning it into a political issue?” he said during the Prime Minister’s Question Time in the Dewan Rakyat on Tuesday (June 6).
“It was not reduced for the people. 90% of the people were not affected as there will be no increase in their electricity charges. Electricity charges for SMEs and food industries were not increased,” he added.
Similarly, Anwar said haj subsidies will no longer be provided for the T20 group, adding that no other subsidies were slashed.
“We cannot reduce the subsidies for the rich? What kind of policy is that? I had to take from the rich so that the poor are not burdened. That too at a minimal rate,” he added.
Anwar was responding to a supplementary question by Datuk Radzi Jidin (PN-Putrajaya) on the measures to ensure that the people are not badly affected by the combination of the depreciating ringgit and reduction of subsidies.
He had also asked if there will be further hikes to the Overnight Policy Rate (OPR).
Anwar said that the interest rate is solely the jurisdiction of Bank Negara Malaysia.
Citing Bank Negara, Anwar said among factors contributing to the depreciation of the ringgit was due to the stronger greenback.
He said other currencies had also been impacted by the stronger US dollar.
Since Dec 31, 2022, the ringgit declined by 3.8%, the Japanese yen by 6% while the Australian dollar, South Korean won and China’s renmimbi lost around 3%.
He said the Singapore dollar remained strong due to tighter monetary policy where the republic had increased its interest rate by 380 basis points.
Anwar added that an aggressive hike in the OPR will impact businesses.
He said the government had also pared down the fiscal deficit gradually, to avoid any rapid and harsh measures which may end up affecting development projects.
He was responding to Radzi’s question on the impact of the devaluation of the ringgit on the country's economic recovery and the approach taken to strengthen the local currency.