Malaysia to cut power subsidies for large businesses: Anwar
MALAYSIA will reduce power subsidies for large businesses and multinational corporations (MNCs), said Prime Minister Anwar Ibrahim, as the government looks to channel spending towards those in need.
Subsidies should not be given to companies and big MNCs that export, he said on Wednesday (Dec 14). He added that small and medium-sized enterprises, as well as those involved in agriculture and food production, will not be affected.
“The decision is clear: we will not burden the people,” said the prime minister. He noted that the increase for businesses will be “very gradual, reasonable so that it will not disrupt their operations”, and added that electricity subsidies for next year are estimated to cost the government RM30 billion (S$9.2 billion).
Anwar has maintained that the top priority of his administration is to reduce the burden of rising prices on low-income groups. Two weeks ago, he asked relevant ministries and agencies to tackle rising living costs, and look at ways to redistribute blanket subsidies that are currently enjoyed by the rich as well as businesses.
Malaysia’s fiscal deficit is the second widest in South-east Asia. Its budget has been strained by the cost of keeping essentials at below-market prices. Government subsidies are expected to reach a record RM80 billion this year. Concessions on fuels and cooking gas are projected to account for about half this amount.
While Malaysia’s economy has rebounded rapidly from the pandemic, the uneven recovery has left many struggling to afford basic foods amid soaring inflation.
On Tuesday, Anwar said the concessions must be funnelled to those most in need. He cited the example of state-run power producer Tenaga Nasional, whose one million corporate customers enjoy more than half of total electricity subsidies. He also said the government will consider intervention methods at the consumer level, to address supply shortages.
Anwar, whose unity government is supported by at least four political groups, said he is confident of surviving the confidence vote next week. He has vowed to show that his alliance commands a majority through the vote, when parliament meets for two days from Dec 19. BLOOMBERG
Share with us your feedback on BT's products and services
