KUALA LUMPUR: There is an urgent need to plug gaps in subsidy delivery and stabilise key cost drivers to ensure there is no runaway increase in prices of goods, say industry players.
Among the areas to look into included diesel-dependent logistics, farm inputs, electricity and financing costs.
The gaps and delays have weakened the government’s intention to help affected industries.
“Targeted diesel subsidy system, for example, must be refined immediately to close eligibility and access gaps,” said Small and Medium Enterprises Association Malaysia (Samenta) vice-president Edwin Ng at a roundtable organised by the Institute for Strategic Analysis and Policy Research (Insap) yesterday.
He said that many SMEs are still unable to benefit due to sectoral exclusions or delays in approvals and reimbursements, forcing businesses to absorb upfront costs.
“Help must be quick and reach the ground. For example, the delay in the issuance of diesel fleet card caused users to pay upfront while the refund is slow.
“Businesses will continue to bleed while waiting for claims to be processed,” he said.
Ng urged the government to consider relief measures, including moratoriums and flexible repayment arrangements, to ease cash flow pressure among SMEs.
“Another helpful way is to give moratorium to the implementation of carbon tax and EPF deduction for foreign workers,” he said.
SME Association of Malaysia treasurer Eng Kin Hoong said improving the efficiency of the Budi95 programme is critical, as implementation gaps have left several industries outside the support system.
He called for a smoother and faster implementation of subsidy mechanisms, particularly in ensuring that eligible SMEs are not left out due to administrative bottlenecks or delays in processing.
“Most importantly, the government must ensure there is sufficient diesel and petrol supply in the market.
“Isolated reports of shortages have fuelled anxiety among businesses.
“Clearer assurances are needed to prevent panic buying and further operational disruptions,” he said.
Federation of Vegetable Wholesaler Associations Malaysia president Steven Lee said input costs such as fertilisers, seeds and pesticides must be addressed.
“The concern now is not just cost, but supply uncertainty. Farmers cannot commit to planting decisions when input prices are volatile and suppliers require upfront payment,” he said.
MCA president Datuk Seri Dr Wee Ka Siong stressed on the need for policy stability.
“When costs fluctuate too much, the impact is not isolated, it moves through the entire supply chain,” he said, adding that such volatility eventually leads to higher prices for consumers.
“Reforms may be difficult, but they are necessary.
“The priority must be stability, predictability and a system that businesses can work with.”
He said that he would bring the concerns and proposals raised by industry players at the roundtable to Parliament, ensuring that the issues discussed, including subsidy targeting, cost volatility and implementation gaps, are formally highlighted at the policy level.
Insap director Woon King Chai said the think tank proposed a three-pronged approach to manage both immediate pressures and long-term fiscal sustainability.
The think tank recommended a 12-month targeted cash transfer of RM200 per month for B40 households and RM150 for lower-M40 groups, to cushion the immediate cost burden.
It also called for greater transparency in the Automatic Pricing Mechanism for fuel, as clearer weekly pricing disclosures would help businesses plan better and reduce defensive price increases.
“For structural reform, Insap suggests beginning groundwork for the eventual reinstatement of the Goods and Services Tax (GST) at 5%, but only after a minimum 12-month consultation period.
“This should be paired with a rationalisation of the Sales and Service Tax (SST) to reduce cascading cost effects across supply chains,” he said.
