KUALA LUMPUR: Following the subsidy rationalization plan announced yesterday, Minister in the Prime Minister’s Department Tan Sri Nor Mohamed Yakcop said the government needs to spend funds wisely to sustain the country’s future development.
“The reason why Malaysia has a subsidy system now is for the people to live comfortably.
“However, under current circumstances where prices are escalating, the government has its spending limits and there is a budget for subsidies,” he said after launching the Northern Corridor Economic Region (NCER) Business Opportunity Showcase here today.
Nor Mohamed said funds generated from tax collection and other forms of revenue can be better utilised to spur further development and growth in the country, for example, enhancing public infrastructure and facilities in the outskirts.
“We are still giving subsidies, but with international crude oil prices rising exponentially, from US$39 per barrel to above US$100 per barrel, we need to adjust prices with the interest of the people in mind.
“Adjustments to electricity tariffs, announced yesterday, will have a minimal impact,” he said, obviously refering to 75 per cent of the population who will not be affected by the increase.
Also present was Deputy International Trade and Industry Deputy Minister Datuk Mukhriz Mahathir who admitted the cost of power was one factor to be evaluated by companies in determining their investment destination of choice.
“Perhaps for those companies that base their viability purely on the cost of energy, maybe they will take this into consideration, but often companies will look at many other different factors before reaching a decision.
“Malaysia is still competitive but when other factors are taken into consideration, potential investors will have to factor them into their costing from now on,” he said. – Bernama