Media statement (2) by Lim Guan Eng in Penang on Thursday, 26^th May 2011: 

Desperate tactics by BN to racialise PR's opposition to price increases will not succeed in deceiving and distracting the people that subsidy cuts only affect 27 million ordinary Malaysians but not impact big companies like IPPs and Felda 

Desperate tactics by BN to racialise PR's opposition to price increases will not succeed in deceiving and distracting the people that subsidy cuts only affect 27 million ordinary Malaysians but not impact the big companies like Independent Power Producers (IPPs) and Felda. BN is so desperate to justify its subsidy cuts that Domestic Trade, Cooperative and Consumerism Deputy Minister Datuk Tan Lian Hoe is accusing DAP of trying to spark a a racial issue over a cut in the sugar subsidy by involving the Federal Land Development Authority (Felda).

This is a stupid argument by Tan as those affected by the price increase of sugar by 20 cents to RM2.30 per kg includes Malays. Or is Tan saying that price increases in sugar and petrol affect only non-Malays?

Tan said in Kuching 2 days ago that DAP had accused Felda of profiting from the subsidy cut in sugar. This is untrue. Tan is deliberately distorting my expose of the profits earned by Felda in the sugar business that was revealed during the listing of its subsidiary, MSM Malaysia Holdings Bhd.

MSM produces close to 60 % of the refined sugar production in Malaysia and is valued at RM2.46bil or RM3.50 a share at by CIMB Investment Bank Bhd. For 2010, MSM made a profit of RM 232 million before the sugar price was increased by 20 cents to RM2.30 per kg.

This profit of RM232 million should be sufficient to cover any savings in sugar subsidies' cuts by the government following the increase in sugar prices. Domestic Trade, Cooperatives and Consumerism Ministry secretary-general Datuk Mohd Zain Mohd Dom had announced that the sugar price increase was to reduce government sugar subsidy by RM116.6 million from RM400 million per year.

What is RM 116.6 million savings from subsidy cuts in sugar by 20 cents compared to RM 232 million in profits earned by MSM last year? The BN government can easily transfer this M116.6 million cost, which is only half of the RM232 million annual profits, to MSM since it is owned by Felda.

Instead, in line with BN's misguided and corporate-centric policy of helping the rich companies at the expense of poor ordinary Malaysians, BN has chosen to hit the pockets of 27 million Malaysians first than the already huge profits of corporate giants such as Felda or MSM. MSM should be asked to contribute by transferring half of their profits to the government and allow the sugar price to be maintained at RM2.10 per kg.

How can DAP be playing racial politics for asking the Federal government to get Felda to use half its profits to "subsidise" the government as a form of social corporate responsibility that will also help Malays? This is typical of BN’s racial politics that tries to pit Malays and non-Malays in a classic case of divide and rule.

All ordinary Malays and non-Malays are equally affected by the price increases. And all rich Malays and non-Malays equally benefit from not having to suffer any subsidy cuts as that suffered by ordinary Malaysians, especially those benefits enjoyed by the Independent Power Producers.

Clearly BN and Tan have run out of ideas by not been able to explain why no action has been taken to reduce gas subsidies of RM 19 billion annually to Independent Power Producers(IPPs), when it can take action to reduce diesel and gas subsidies of a few hundred million ringgit that hurts ordinary Malaysians.

A more just and fair socio-economic policy should be to cut the subsidies of the rich first instead of the poor. The failure by BN to do so clearly shows that BN is about Barang Naik instead of PR (Price Reductions).

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