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Is there any good in withdrawing subsidies?

Is there any good in withdrawing subsidies?

The Government's recent an-nouncement of an impending subsidy cut or withdrawal has roused heated debates among the public.

In all articles written on the subject (at least in the mainstream media), the contention seems to be that a subsidy withdrawal, or at least a subsidy cut, is good and beneficial in the long run for the country's economy.

Datuk Seri Jala, the Minister in the Prime Minister's Department who mooted the idea during the subsidy rationalisation lab open day in Kuala Lumpur on May 27, implored the Malaysian public to "make the changes... now". His call is based on:

  • Our progressively increasing fiscal deficit over the last 10 years from RM5 billion to RM47 billion last year;
  • Increase in borrowing due to our slower GDP growth rate, resulting in our government taking loans with debts from RM90 billion in 1997 to RM362 billion last year; and
  • Malaysia being one of the world's highest subsidised countries in proportion to our GDP at 4.7%.

Briefly, Datuk Idris revealed that if the country continued on the same trend, based on our annual increase of 12 percent, our debt would reach a staggering RM1,158 billion in 2019. He postulated that based on our escalating deficit exceeding 10 percent, Malaysia might end up bankrupt and in a similar economic situation like Greece!

The sum projection by the Minister is alarming and cause for great concern for those of us living towards that era. Yet, there are those who may say that this is government propaganda and they are merely figures based on assumptions and projections.

Life, they say, is more volatile and positive.

 

We say...

While the critics may have a point, what about us Christians? Are we to adopt the posture and position found in mainstream media that the withdrawal of subsidies is good for the nation? John Teo, for example argues that,

Far better (and what would make more administrative sense) would be to do away with such subsidies altogether and seeing to it that targeted groups get direct cash handouts or higher salaries to cushion them from price increase. The bottom line is that the issue of subsidy withdrawal cannot be taken in isolation and must be rolled out as part of the overall strategy to re-jig our economy to become not just healthily sustainable but the high-income one to which we aspire (John Teo, "Overall Subsidy Cuts will be good for Malaysia", News Straits Times, June 4).

While this assertion may seem good in writing and may even appear sensible, we hear news about the Barisan Nasional Government's intention to buy three special ships for our navy costing RM2.2 billion! Now, if things are that bad, how can the Government justify spending so much in buying ships that we may or may not have use for, or at least deemed necessary, with monies which the Minister said we did not have?

As Christians who are called to be stewards and custodians of earth's resources, it is imperative that we are aware of and participate in the process of common decisions about managing the resources of our common life in Malaysia and ensuring that the institutions so created do their work effectively.

Christians must, to the best of our ability and God-given gifts and talents, ensure the best possible livelihood for everyone, that no one be exploited or taken advantage of in this new scheme of subsidy withdrawal, if it were to happen.

It has to do with ensuring that the goods necessary for survival and for the functioning as free and equal citizens in this country are made available for all and take priority over all other gains and benefits that may favour some select groups or elite.

To this end, we call on the Government in the implementation of this subsidy withdrawal to: (1) ensure that there is a safety net in place for those in poverty; (2) address the continued stream of leakage and wastage in the system that have bode distrust and skepticism; and (3) continuously educate our public on the ills and disadvantages of subsidies for long-term public life and interest.

We therefore call on Christians and the Church of Malaysia to pray:

  • For the Government to be wise and honest in managing public funds
  • For a responsible Government who reveres the role it has been placed in to protect and manage the resources;
  • For a Government that is sensitive to the needs of the rakyat, particularly the poor;
  • For the appointment of capable, skilled, responsible leaders of the highest integrity to plan, manage and execute projects that are truly beneficial to the rakyat; and
  • Against grand, wasteful projects that are drawn up to benefit certain people.


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