KUALA LUMPUR - The Finance Ministry today stressed that allegations that the government is reducing aid and subsidies are untrue.
Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz said the fact is the government continues to provide various assistance and subsidies to the people, especially related to oil and petroleum.
"The government has also introduced new subsidies that are not included in Budget 2022, namely for chickens and eggs as well as electricity.
"For petrol, diesel and liquefied petroleum gas (LPG), for example, the estimated subsidy requirement this year is RM37.3 billion, compared to RM13.2 billion last year,” he said at the Minister's Question Time session in Parliament today.
Apart from that, he said (subsidy for) cooking oil had reached RM4 billion, compared to RM2.2 billion, and for other consumption subsidies, the estimated expenditure was RM9.7 billion compared to only RM1.1 billion last year.
He said this while answering a question from Wong Hon Wai (PH-Bukit Bendera) who wanted to know how the government would fund the total subsidy which is expected to reach RM80 billion for 2022 and the kind of subsidy policy reform that is being planned.
According to Tengku Zafrul, higher crude and palm oil prices this year are expected to generate additional tax revenue of more than RM10 billion.
"In addition, the momentum of recovery exceeded expectations with very encouraging gross domestic product (GDP) growth for the country in the first quarter of this year at five per cent and is expected to be stronger in the second quarter," he said.
Based on the trend, he said the country would receive additional revenue related to income tax and indirect taxes in excess of a further RM10 billion.
"However, all these revenue increases are not enough to cover the increase in subsidies which have exceeded RM40 billion,” he said.
He added that the government’s strategy is to review and re-evaluate the effectiveness of each subsidy programme and incentive that had been implemented and also continue to examine additional revenue sources and savings to meet the additional subsidy needs for the second half of 2022.
"I also want to emphasise that measures for the well-being of the people will continue," he said. - BERNAMA