The subsidy increases in 2023 is accommodated through savings other expenses and increased revenue. For the year 2023, estimated revenue which was revised to be 303.2 billion ringgit instead of 291.5 billion ringgit The total deficit is projected to be 5 percent to GDP as set.
The government will conduct the retargeting of subsidies which will be implemented in phases starting next year.
Subsidies are also being enjoyed by more than 3.5 million foreigners.
Subsidised goods help the people with minimising the rising cost of living, but subsidies benefit the rich more and cheap prices has caused the increase of leakages and smuggling activities.
The government has allocated RM64 billion for subsidy and aid spending, but this year’s needs are expected to reach RM81 billion.
- Conceptually, subsidised diesel prices will continue to be enjoyed by selected users such as goods transport companies while other users will be charged a higher price.
- The government intends to rationalise diesel subsidy in a phased manner.
- There is a possibility of serious smuggling activities as a result of Malaysia’s diesel prices being too cheap.
- In addition, the government also agrees to exempt electricity bill account deposit payments in its own name.
- The government agrees to continue providing electricity bill rebates of up to RM40 per month to extremely poor households with an allocation of RM55 million.
- The government will continue to improve the targeted electricity subsidy approach according to the level of electricity consumption.
- This targeted approach has been able to save more than RM4.6 billion from the projected electricity subsidy of RM20 billion.
- The government has implemented targeted subsidies by releasing a portion of the subsidy for the top 10 per cent of electricity users but at the same time, maintaining the same subsidy for 90 percent of consumers.
- The government has spent RM3.8 billion for egg and chicken subsidies since Feb 2022, to control the prices of these items.
