Failure to curb subsidy leakages risks economic liabilities, says economist

Free Malaysia Today

Goh Lim Thye says the lack of reforms carries a risk that subsidies will become politically entrenched liabilities rather than tools for equitable development.   Read More:  https://www.freemalaysiatoday.com/category/nation/2025/05/22/failure-to-curb-subsidy-leakages-risks-economic-liabilities-says-economist   Laporan Lanjut:  https://www.freemalaysiatoday.com/category/bahasa/tempatan/2025/05/22/gagal-bendung-ketirisan-subsidi-berisiko-jadi-liabiliti-kata-ahli-ekonomi   Free Malaysia Today is an independent, bi-lingual news portal with a focus on Malaysian current affairs.    Subscribe to our channel - http://bit.ly/2Qo08ry   ------------------------------------------------------------------------------------------------------------------------------------------------------  Check us out at https://www.freemalaysiatoday.com  Follow FMT on Facebook: https://bit.ly/49JJoo5  Follow FMT on Dailymotion: https://bit.ly/2WGITHM  Follow FMT on X: https://bit.ly/48zARSW  Follow FMT on Instagram: https://bit.ly/48Cq76h  Follow FMT on TikTok : https://bit.ly/3uKuQFp=  Follow FMT Berita on TikTok: https://bit.ly/48vpnQG  Follow FMT Telegram - https://bit.ly/42VyzMX  Follow FMT LinkedIn - https://bit.ly/42YytEb  Follow FMT Lifestyle on Instagram: https://bit.ly/42WrsUj  Follow FMT on WhatsApp: https://bit.ly/49GMbxW  ------------------------------------------------------------------------------------------------------------------------------------------------------  Download FMT News App:  Google Play – http://bit.ly/2YSuV46  App Store – https://apple.co/2HNH7gZ  Huawei AppGallery - https://bit.ly/2D2OpNP   #FMTNews #GohLimThye #Subsidy

Transcript

00:00Subsidy leakages severely undermine economic efficiency and fiscal discipline, with short-term

00:07consequences like revenue losses and weakened fiscal transfers, says economist Golem Tai of

00:12University Malaya. He said in the long run, leakages entrench rent-seeking behavior,

00:18discourage energy efficiency, and delay a sustainable subsidy framework, adding that

00:23without reform, subsidies risk becoming fiscal liabilities instead of tools for equitable

00:27development. Meanwhile, Madeline Burma of Institut Masa Dipan, Malaysia warned that leakages

00:33also feel public distrust and worsen income inequality, creating opportunities for corruption.

00:39She said that while Malaysia is still grappling with leakages and has yet to entirely eliminate

00:43them, the government's move to rationalize diesel subsidies in June last year had led

00:47to significant decrease in leakages. The government ended egg price controls and

00:52cut subsidies from $0.10 to $0.05 per egg, with full removal planned for August 1st.

00:58The Agriculture Ministry said this was necessary for fiscal sustainability and fairness, as subsidies

01:03have been benefiting foreign nationals and high-income groups.

01:07Meanwhile, economist Jeffrey Williams says by resetting the system and using technology to

01:12monitor eligible recipients, reforms saved RM7.5 billion, allowing redirection of funds to health,

01:18education and social protection, while eliminating corruption and improving market efficiency.

01:24Dhanush Rajareza, FMT

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