JULY 16 — Malaysians today woke up to higher prices for fuel and sugar which the government called a “subsidy rationalisation” that will not burden the people but still reduce government expenditure.

Of course, the government is right. Five sen extra for a litre of fuel would also cost RM3 more for a 60-litre fuel tank. And sugar will only cost 50 sen more for every two kilogrammes. Bernama also reported that it will mean an extra 1.25 sen for a cup of teh tarik.

Nothing to get excited about. Except that the Najib administration only finally issued a statement late last night after rumours had swirled for almost the entire day of impending price hikes.

At the heart of the issue is not so much the price hike, which had been looming for some time, but the method of announcement and excuses for the subsidy cuts.

The Barisan Nasional (BN) government really does not need to stop its political rivals from using party newspapers to run it to the ground. Or stop renewing their printing permits to shut them up because BN is doing a great job of shooting itself in the foot with its handing of the latest subsidy cuts.

After all, the subsidy cuts had been flagged in Datuk Seri Idris Jala’s subsidy labs recently. There is even a schedule for cuts to be made every six months that could see the price of a kilogramme of sugar hitting RM2.40 within a year or so.

Ditto for fuel prices that could closely match market rates in the same period.

Which means the government should just come out and say that subsidies will be cut progressively to reduce the subsidy bill of some RM7 billion annually. Instead of quietly issuing it at night after Parliament had finished its latest session.

Also, the latest cuts will only shave RM750 million annually and it was announced the same day the government admitted that it has given RM4 billion to the PM’s Department, which has seen its staff double to over 40,000 in 2010.

This is similar to the time last month when the government suggested it had no money to give out federal scholarships to 1,500 best and brightest Malaysians although it was paying RM800 million for a new national palace and considering RM800 million for a new Parliament.

And thus within 24 hours, BN’s political foe Pakatan Rakyat (PR) went to town with a list of projects and expenses undertaken by the ruling coalition that made the savings look like nothing more than pocket change.

Both BN and PR agreed there should be subsidy cuts but the number of extravagant BN projects has only raised the ire of the people, notwithstanding that the price of fuel remains among the lowest in the region.

That statistic is disingenuous at best. Yes, prices of fuel are lower in Malaysia than other countries but the price of cars are not. For example, the price of a standard Toyota Vios is only RM51,000 in Thailand against RM70,000 in Malaysia. A litre of RON95 petrol in Thailand is RM4.12 against RM1.85 in Malaysia.

Cheaper car, pricier fuel. That would be fair.

After all, when comparing prices, it is always better to put in some context and perspective in terms of the economy and population.

Take, for instance, allocations for the PM or presidential offices of Malaysia and its neighbours vis-a-vis population and other data.

Malaysia with a population of some 26.1 million people has given RM4 billion to the PM’s Department against Indonesia’s 242.9 million population where the presidential office only gets RM634 million which is nearly the same as Singapore where the PM’s Department gets RM677 million for a population of just 4.7 million.

Statistics can be used to make any kind of point in an argument. The Najib administration needs to do a better job of selling the subsidy cuts by ensuring it also slashes expenditure and adjusts to a new austere lifestyle that it preaches to the people.

The BN government must cut through the nonsense and walk the talk. Otherwise it might have to take a hike in the next general election.

source: The Malaysian Insider