Datuk Donald Lim (left) with China’s Ambassador to Malaysia, Chai Xi.
Putrajaya will order all government departments to cut costs as the Najib administration looks for ways to trim the country’s subsidy bill that could top RM21 billion this year.
Deputy Finance Minister Senator Datuk Donald Lim Siang Chai revealed the Chief Secretary would issue the orders, saying today that the government must be more prudent in its spending.
“So I believe the directive from KSN and so on to ensure that everyone has to control ourselves and not overspend,” he told reporters here, referring to Chief Secretary to the Government (KSN), Tan Sri Mohd Sidek Hassan.
Prime Minister Datuk Seri Najib Razak has said fuel subsidies were “like opium” to the Malaysian economy, and would have to be gradually slashed as the initial bill of RM11 billion had soared to RM18 billion for this year due to escalating prices of crude oil.
The consumer price index also rose by 3 per cent in March — the fastest rate in nearly two years — with the price of non-alcoholic foodstuff surging by 4.7 per cent.
Analysts and politicians believe that economic woes will be the biggest problem for the Barisan Nasional (BN) administration as the country moves towards a general election expected within the year.
Lim also said that it was impossible to find a win-win situation for both the government and the public.
“If you maintain the current prices then of course the public will be happy but then you have the problem of balancing (the costs); if you increase (the prices) like in other countries then the public will find it difficult to survive, so of course it is difficult,” he said.
“To find a win-win situation is not possible because things will go up only and we need to look for a formula where both don’t lose so much.”
According to a Bloomberg report last month, surging fuel prices and unhappiness over the implementation of race-based policies contributed to the ruling coalition losing control of five of 13 states to Pakatan Rakyat in Election 2008, where it also ceded a record 82 out of 222 seats in Parliament.
Umno Youth chief Khairy Jamaluddin recently called on the government to slash funding to ineffective programmes such as the National Service before asking the public to accept the subsidy cuts that the Najib administration has hinted at recently.
Khairy, who is Rembau MP, also called for a review of federal government expenditure to rein in spending on these programmes, which could free up funds to maintain subsidies that were crucial to softening the impact of rising prices.
