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Confusion in subsidy figures RM74billion vs RM18.6billion

June 14, 2010

Update Koh seeks to clarify ‘disparities’ in subsidies’ figures

Written by Chua Sue-Ann
Wednesday, 09 June 2010 16:57 The Edge
KUALA LUMPUR: Minister in the Prime Minister’s Department Tan Sri Dr Koh Tsu Koon on Wednesday sought to clarify minor confusion over apparent disparities between figures provided by the Treasury and the Performance Management and Delivery Unit (Pemandu) on how much subsidies were costing the country.

Pemandu, which comes under the prime minister’s department, had put the total cost of subsidies in 2009 at about RM74 billion when Pemandu CEO Datuk Seri Idris Jala last month pitched his case for the urgent need to reduce subsidies.

During a briefing for Barisan Nasional (BN) backbenchers in parliament on Tuesday, Treasury officials reportedly put the country’s total subsidy bill at RM18.6 billion for 2009.

At a press conference in parliament’s lobby on Wednesday, June 9, Koh said the Treasury’s figures referred only to direct subsidies involving the Treasury while Pemandu’s RM74 billion figure included all indirect subsidies and from all public sources.

Koh also said that a quick check revealed that the Treasury’s figures did not include the RM12 billion spent on petroleum subsidies by national oil company Petroliam Nasional Bhd (Petronas) because “the Treasury considered that the amount was not borne directly by the government”.

The Treasury may not have included the total cost of education subsidies in arriving at its figures, Koh added.

“Hence, the Treasury is looking strictly from their angle and their own budgeting concerns but the Pemandu lab looked at the overall picture. So both are right in their own contexts,” said Koh.

Based on Pemandu’s studies, the government had spent RM23.5 billion to subsidise the cost of fuel, RM41.8 billion for social welfare, RM4.6 billion for infrastructure, and RM3.1 billion for food items.

Jala also sparked outcry and criticism when he warned that Malaysia could be bankrupt by 2019 if it did not begin to slash subsidies for fuel, infrastructure, food staples and other items.

A news portal which sighted the Treasury’s subsidy figures reported that RM7.1 billion was for fuel, RM0.8 billion for infrastructure, RM2.9 billion for food and RM7.8 billion for social welfare, based on the Treasury’s figures.

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