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MAY 31 — It is almost sad to read about Datuk Seri Idris Jala trying to explain why we need to reduce or eliminate subsidies in Malaysia and the poor response he seems to be getting especially on the internet. He is nevertheless correct. If we carry on this way we will be in the same situation as Greece a decade from now.

It seems that we as a nation have an accumulated debt of around RM360 billion as at the end of 2009. That is just over half of our GDP. While it is still manageable, the alarming part is if we still have to continue to borrow, into the next decade, at the same level as the last. We actually must balance our budget now.

Stopping the subsidies is a good start as it will negate any impact on the country from black markets both within and across our borders. It is ridiculous to me that we should allow foreigners to benefit from our subsidies but that is exactly what is happening.

If goods are bought in Malaysia without any subsidy and are then smuggled into a neighbouring country that is a different matter. The costs of these are not borne by our nation. Saving RM20 billion a year is a big deal for us and can be the difference between a balanced budget and one that is not.

At the same time, our use of fuel at 400L per capita per year is too much. China only consumes 50 litres per capita per annum. Both from an environmental and competitive stand point, we must consume less.

Subsidising our nation’s like for fats and its sweet tooth will cost us more in the future in the form of increased healthcare costs. There is no question in my mind that these subsidies have to go as they are counterproductive to our goal of becoming a developed nation.

The hue and cry from many is because of the perceived high level of corruption within the country. The thinking is that at least I — the man on the street — get something now, whereas you guys in government get a lot more from your corrupt practices. Why should I lose out while you guys carry on as usual?

My thinking is different. The subsidies should not be used as a tool to keep the rakyat quiet about corruption. The amount of actual benefit we each get from it is very little. We should now tell the government not only to stop the subsidy but also eliminate corruption (which by some accounts also cost us RM20 billion a year) and wasted government expenditure on unnecessary seminars, courses and travel.

In our development expenditure, we must only spend on our priorities. For example, we must spend wisely on public transport that ensures a safe, fast and comfortable commute for everyone. That means we need many more buses, bus lanes and an integrated public transport infrastructure.

We can even give this service for free if we were able to collect congestion charges from other vehicles entering the cities. Spending on this is fine as long as it works, because the spinoffs for the economy are tremendous.

We should suspend our purchases of big ticket items such as defence equipment and major building construction until we are financially stronger. We have already built a lot of buildings such as schools, hospitals, government offices, housing and so forth. They need to be used optimally.

The rakyat will support the removal of subsidies if the government too shows that it is serious in cutting down its own operating and development expenditure, and taking serious action on corruption.

No more subsidies, fine. But balance the budget and reduce our national debt. Walk the talk.

* The views expressed here are the personal opinion of the columnist.