MCA calls on Minister of Economy Rafizi Ramli to refrain from making announcements regarding the government's intentions to reduce or abolish fuel subsidies without accompanying details on the implementation process. Such actions only serve to instigate stress and panic within both the public and the economy, thereby undermining market confidence.

In light of Rafizi's reiterated assertions regarding the government's intention to slash fuel subsidies this year, we implore the government to adopt a more professional approach by furnishing comprehensive details on the proposed measures. This should encompass the implementation mechanism, methodology for identifying target groups, and the sectors that will be impacted.

If the government is using the Central Database Hub (PADU) as the data foundation for reducing or abolishing fuel subsidies, then there will be significant doubts about whether the measures can be effectively implemented and truly benefit the people.

As of March 31, only one-third of the population have registered with PADU. Coupled with the fact that the Sarawak and Sabah governments have expressed their non-support, if the government persists in utilising PADU as the foundation for reducing or abolishing subsidies, we can anticipate yet another catastrophe. Two-thirds of the population, many of whom rely on the subsidies, will face substantial burdens if they lose access to them, and the government's objective of rationalising subsidies will not be achieved.

Another pressing concern is whether this is the right year to reduce or abolish fuel subsidies? Observing the broader market context, where the government is introducing new taxes, augmenting and broadening the Sales and Services Tax (SST), escalating water and electricity tariffs, and implementing the electronic invoice system in August, prices are escalating incessantly, and many small businesses have shuttered their doors. Both businesses and consumers are already grappling with these challenges, and the ramifications of further subsidy reductions are unfathomable.

We urge the Ministry of Economy to learn from past mistakes and avoid repeating the failures of previous policies that caused market panic due to a lack of clarity. The government should provide clear explanations to the people and seriously consider the impact of canceling various subsidies on people's livelihood and the economy.

Datuk Dr Pamela Yong
MCA Deputy Secretary General

18 April 2024

-MCA Comm-