Media statement by Lim Guan Eng in Penang on Wednesday, 18^th May 2011: 

BN government should first remove the "Big Opium" of RM19 billion annual gas subsidies for independent power producers(IPPs) and commercial power sectors before removing the "Small Opium" of sugar, diesel and petrol subsidies for the masses 

The BN government should first remove the "big opium" of RM19 billion in annual gas subsidies for IPPs and commercial power sectors before removing the "small opium" of sugar, diesel and petrol subsidies for the masses. DAP strongly opposes the removal of the subsidy for diesel from 1 June 2011 without first removing the super subsidy of gas that affect the few giant IPPs because it will cause inflation directly impacting on small businessmen and consumers.

The Najib administration expects to save RM659.3 million this year by removing the diesel subsidy but will still have to fork out RM116 million to subsidise the public transportation sector. Those affected will no longer be able to purchase diesel at the subsidised rate of RM1.48 per litre but will have to pay the RM1.80 pump price. Those affected include general cargo movers, vans, rigid-lorry for bottled beverages, tankers for flour transport, refrigerated goods, water tankers, limousine taxis, prime movers, luton box vans and Category C-2 deep sea fishing vessels.

Why should the masses and the ordinary 27 million Malaysians be made to bear these price rises when the few big corporate giants in the IPPs do not suffer a single cent in gas subsidies cuts? The removal of the subsidies for the poor is a double blow because of their stagnating wages whilst the IPPs profits escalate because they enjoy annual RM19 billion in gas subsidies. Reports show that 40% of households in Malaysia earns less than RM1,500 in average monthly income with some stating that 34 per cent of Malaysian workers earn monthly salaries of below the poverty line at RM700.

Between 2000 and 2010, wages increased by only 2.6 per cent, meaning that in the last ten years, there has been wage stagnation and our wages cannot match the rising cost of living. This follows the country's household debt to the GDP is 78 per cent, and in the next two years, it will rise to 80 per cent.

There should be a two-prong approach in dealing with removal of subsidies which the Prime Minister has described as opium. Such a remark is insensitive and unfair to the poor who requires some sort of subsidy to deal with rising prices.

First, deal with the bigger opium of corruption which causes a minimal annual loss of RM28 billion annually with some estimates of losses running up to US $100 billion since the 1980s. Secondly remove the big opium of gas subsidies that can save tens of billions of ringgit annually before dealing with the opiate for the masses that only save hundreds of millions of ringgit.

*Lim Guan Eng, DAP Secretary General & MP for Bagan