Give me efficiency before you take my subsidy

There are more news of subsidies being taken away from the people of Malaysia from the Government of Malaysia.

Praise to Allah, he has lifted me from being one of those who need the subsidy BUT there are plenty of others that do need the subsidy - the poor, the orphans and the needy. But my argument is not about the subsidy being 'slashed', but rather what do you do with the savings.

As long as the government is in deficit, the law of basic mathematics says that the savings from the subsidy will be spent by the Government. They will use it for other purposes.

These 'other purposes' must yield better return and benefits (both socially and economically) to the country compared to the benefits of the subsidy. If the returns and benefits are higher, then as a country, we make progress - we created value (in which case I support subsidy reduction with a MORE SIGNIFICANTLY IMPROVED JABATAN KEBAJIKAN MASYARAKAT).

But if the return from these 'other purposes' is lower, then the Government has destroyed value.

The AG report recently shows that these 'other purposes' could fall to become leakages - wastage. If that happens, than all the savings from the subsidy will be drained away.  I am not saying that this will definitely happen, but there is a possibility of it happening. Based from The AG's report, the 'happening' could be in billions of ringgit.

My say is DO NOT talk about taking away the basic subsidies until you have proven to be efficient to handle the money that you already have. Stop the leakages, stop the corruption. 

Here is the report from the STAR Newspaper (and the photo belongs to STAR too)

 

AYER HITAM: Consumers must be prepared for a possible hike in sugar and flour prices if the Government decides to further reduce subsidies for the two essentials.
Domestic Trade, Co-operatives and Consumerism Minister Datuk Hasan Malek said: “If certain decisions could help to strengthen the economy, we will have to do it although it may not be well received.
“We will have various possibilities, and decisions will be made based on our studies.”
Hasan said the Government’s priority was to enhance the economic growth and development of the country, as well as to take care of the people’s welfare.
Hasan said the details would be announced by Prime Minister Datuk Seri Najib Tun Razak during Budget 2014 on Oct 25.
“Letting the people understand the reasons behind the slashing of subsidy is important,” Hasan said after opening a new Kedai Rakyat 1Malaysia (KR1M) located at Bandar Baru Ayer Hitam here yesterday.
He said this year, the Government would set up 40 more KR1M (Kedai Rakyat 1 Malaysia) outlets nationwide, especially in Sabah and Sarawak.
He said in Johor alone, 12 KR1M outlets had been set up.
“An additional four more are being planned for Segamat, Batu Pahat, Bakri and Sri Gading, ” added Hasan.