THE fiscal sustainability of the nation will continue to be on the Finance Ministry’s agenda and several incentives to achieve this objective are expected to be announced in Budget 2023, said Deputy Finance Minister Mohd Shahar Abdullah.

He said to address the effects of price increases of basic necessities, the government would continue existing subsidies, particularly consumer subsidies covering petrol, diesel, liquefied petroleum gas, cooking oil, flour, electricity, chicken, and eggs, as well as various social aids such as social welfare assistance that included Bantuan Keluarga Malaysia.

The total subsidies and social assistance are projected to reach close to RM80 billion for 2022, the highest in the country’s history, he added.

“This is a huge decision (to determine the subsidies via targeted or bulk); the finance ministry examines it comprehensively and conducts engagements as best as possible.

“InsyaAllah, soon, during Budget 2023, we may announce the incentives that will enhance the nation’s fiscal sustainability,” he said.

Shahar’s reply was in answer to a supplementary question from Salim Mohd Sharif (Jempol-BN) who wanted to know whether the government’s subsidy allocation would be implemented via a targeted or bulk system.

The deputy minister said Budget 2022 was drafted based on the crude oil price of US$66 a barrel. At present, the commodity’s price is over US$100 a barrel, whereby every US$1 rise per barrel would give an increase of RM300 million in oil revenue, he explained.

“However, due to existing policies to help the people, we created a ceiling price (for RON95) at RM2.05 per litre wherein we have to cover more or less RM600 million (in oil subsidy).

“True that there’s an increase in the prices of Brent crude and crude palm oil (in the global market) ...but we only rake in RM10 billion in revenue from these increases. We still need to add RM40 billion (for subsidies),” he added.

Apart from that, Shahar said the government had also implemented measures to contain the rise in the cost of living for households, among them, by setting the ceiling price for certain food products as well as continuing efforts to enhance the production and productivity of local agricultural activities.

The government will continue to monitor the external factors that would negatively impact the domestic economic situation to ensure control of the people’s cost of living, he said. – Bernama, July 26, 2022.