Subsidy mentality bodes ill for country

  • Letters
  • Monday, 13 Aug 2018

I WAS surprised by the government’s intention to reduce the current retail price of coarse sugar in order to lower the cost of living in Malaysia. The price of sugar in Singapore, Indonesia and Vietnam is RM4.65, RM3.58 and RM4.41 per kg respectively. At RM2.95 per kg, the sugar price in Malaysia is the cheapest in Asia.

Malaysia has the highest rate of diabetes in Asia and one of the highest in the world. Currently, there are about 2.5 million Malaysian adults who are diabetic and almost half of these unfortunate sufferers do not know how they contracted this chronic ailment. Considering the adverse health effects of consuming too much sugar in our diet, are we helping Malaysians to lead a better life by lowering the price of sugar?

Malaysians are also paying one of the lowest domestic electricity tariffs in the world. This has encouraged many families to install air conditioners at home at the expense of the environment. Air conditioners contain halogenated chlorofluorocarbons that emit greenhouse gases, which have an effect on ozone depletion. Prolonged sleeping in an air-conditioned rooms without proper ventilation has certain unhealthy impacts on one’s health too.

Many of my neighbours, though in their 60s, are still toiling long hours as odd job workers to make ends meet but they can afford to enjoy the comfort of air conditioning at home. One told me he couldn’t sleep if the air conditioner was not switched on.

Subsidy is a double-edged sword. It could help but also harm a large section of the community inadvertently. If my neighbour were to lead a simple life like me, I believe he would have been able to retire by now as he has been suffering from back pain for quite some time. Unfortunately, he is not only burdened by a heavy electricity bill but also an expensive car loan to pay every month. Hopefully, he can retire before celebrating his 70th birthday.

The subsidy mentality has long been entrenched in our society. In fact, implementing the goods and services tax (GST) four years ago was an effective way to gradually remove this entrenched mentality. With GST, the more you consume, the more you would have to pay, and this would encourage people to lead a more frugal life. After all, most essential goods were zero rated under GST.

I urge the new government to practise more restraint in giving out subsidies. The abolition of GST will result in an annual shortfall of RM20bil in the national coffers. As our country has been running on a budget deficit for a long time, there is an urgent need to rectify this weakness. If not, it will be vulnerable to a national debt crisis.



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