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ARKIB : 01/11/2004

Govt finds ways to reduce people's dependence on subsidy - Hassan

KUALA LUMPUR Oct 31 - The government has to find ways to reduce the lower income group's dependence on subsidy while ensuring the move will not adversely affect their livelihood, President and Chief Executive Officer of Petronas Tan Sri Mohd Hassan Marican said.

This, he said, was the actual challenge for the government which had provided huge allocations every year for the purpose.

For fuel subsidy alone, he said, the government had to spend RM14 billion a year.

"This money could have been utilised to build schools, hospitals and implement other projects," he said in a interview with Mingguan Malaysia.

He was asked whether the people could afford it if the government stopped giving subsidies.

Mohd Hassan felt the objectives of giving subsidies had not reached the target groups and faced various weaknesses.

He said the government provided subsidies every year, including for fertilizers, petroleum, diesel and gas.

In fact, electricity for the people was also subsidised, he said.

"The question is for how long this subsidy culture is going to continue?" he said.

Asked whether the allocations for subsidies came from Petronas, Mohd Hassan said it came from the government's budget, which included taxes from Petronas.

This year, Petronas recorded a profit of RM37 billion. However, the profit was given back to the government, with the rest reinvested for the company's expansion, for building petrochemical plants and so on.

"We pay 38 percent tax for petroleum revenue, 28 percent income tax, royalties and import tax, all came to RM29.92 billion," he said.

Mohd Hassan, however, said the government had to continue paying attention to giving subsidies to these target groups.

He proposed a tax exemption of RM500 or more for those who could ill-afford if the government decided to withdraw the subsidies.

On the move by certain groups to raise prices of goods indiscriminately following the five sen rise in fuel price, he described their action as a form of exploitation.

"We need to make a thorough analysis to see the impact on the public. If not, this is an exploitation and opportunistic," he added.

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Waktu Solat Kuala Lumpur
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Zuhur 1:17
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