THE subsidy rationalisation policy must be reviewed as the planned withdrawal of petrol subsidy for T15 household will result in higher cost of living and inflation due to its ripple effect on the economy, says Tan Sri Muhyiddin Yassin.
Calling on the government to review its proposed plan that was announced in Budget 2025, the Pagoh MP said inflation was expected to rise between 2% and 3.5% next year.
He also questioned the decision on petrol subsidy withdrawal, pointing out that the T15 group or top 15% income group has yet to be clearly defined.
“Husband and wife that earn RM7,000 a month can end up under the T15 group.
“It will be unfair to classify such families as ‘ultra rich’ when their disposable income will be affected by housing and car loans including education fees for their children,” he said when taking part in the debate on Budget 2025.
In 2022, the T15 group was defined by the Statistics Department as those with a household income of at least RM13,295.
Under Budget 2025, those under T15 will no longer be eligible for health, education and fuel subsidies.
Muhyiddin added that the RM1,700 minimum wage next year would also result in higher cost of living for consumers.
He said this was because employers, including smaller businesses would eventually transfer the higher cost of operations to consumers.
“There must clear policies and action to control prices of goods if there is to be a wage increase next year,” he said.
He suggested that the government set up a special Fund For Food to address the rising cost of food which will affect the poor and those in the lower income group.
The Pagoh MP said that rather than making sweet talks, the government should ensure that its promises were delivered.
“The other side has made many public announcements but they were not implemented or done otherwise.
“This has given rise to questions whether the Madani government will deliver its promises,” he said in reference to the rising cost of living that affected the people, despite foreign investments hitting RM160bil, with economy growing at 5.9% and inflation at 1.9%.
He said despite positive economic indicators, studies done by independent think-tanks show otherwise with regard to the reality on the ground.
He cited a study by the Malaysian Institute for Economic Research, which found that 72% of respondents were significantly affected by the rising cost of living with a majority of them forced to cut on their daily expenses.
