Malaysia to cut power subsidies to large businesses, PM Anwar says
Malaysia will start reducing power subsidies for large businesses and multinational corporations, Prime Minister Anwar Ibrahim said, as the government looks to channel spending toward the needy.
Subsidies should not be given to multinational companies and big MNCs that export, he said in a briefing after chairing a cabinet meeting on Wednesday. Small- and medium-sized enterprises and those involved in agriculture and food production will not be affected, he added.
“The decision is clear: we will not burden the people,” Anwar said.
The increase for businesses would be “very gradual, reasonable so that it will not disrupt their operations,” he said, adding that power subsidy for next year is estimated to cost the government RM30 billion.
Anwar has maintained that reducing the burden of rising prices on low-income groups is the top priority of his administration.
Two weeks ago, he asked relevant ministries and agencies to come up with measures to tackle rising living costs and look at ways to redistribute blanket subsidies that are currently enjoyed by the rich as well as businesses.
Malaysia, which runs South-east Asia’s widest fiscal deficit after the Philippines, has seen its budget strained by the cost of keeping essentials at below-market prices.
Government subsidies are expected to reach a record RM80 billion this year, with concessions on fuels and cooking gas alone projected to account for about half the amount.
While Malaysia’s economy has rebounded rapidly from the pandemic, the uneven recovery has left many struggling to afford basic foods amid soaring inflation.
On Tuesday, Anwar said the concessions must be funneled to the most needy, citing an example of state-run power producer Tenaga Nasional Berhad, whose 1 million corporate customers enjoy more than 50 percent of the electricity subsidy.
He also said the government will consider intervention methods at the consumer level to address supply shortages.
Anwar, whose unity government is supported by at least four political groups, said he is confident of surviving the confidence vote next week.
He has vowed to show that his alliance commands a majority through the vote when Parliament meets for two days from Dec 19.