He said the government would focus on big ticket items such as fuel, electricity and toll to achieve the savings but it would continue to subsidise the poor and disadvantaged.
"The time for subsidy rationalisation is now. Otherwise, we have a time bomb on our hands," Idris said on the open day on the subsidy rationalisation plan proposed by the Performance Management and Delivery Unit (Pemandu) of the PM's Department.
Idris, who is Pemandu CEO, told a packed hall at the Kuala Lumpur Convention Centre, that Malaysia was one of the highest subsidised nations in the world and the subsidies must be phased out gradually.
"We do not want to end up like Greece. Our deficit rose to a record high of RM47 billion last year," he said, adding that at the rate, the nation could go bankrupt by 2019 with debts totalling RM1.158 trillion.
He said Malaysia's debt stood at RM362 billion while the deficit was RM47 billion last year.
The subsidy bill was RM74 billion with RM42.4 billion going towards social needs, RM23.5 billion for fuel, RM4.8 billion for infrastructure and RM3.4 billion for food, which works out to RM12,900 per household.
In comparison, the prices of sugar, cooking oil and flour in Malaysia are the lowest in the region while Malaysia consumes more fuel per capita than many countries including Singapore, Indonesia, Thailand, China and India.
Overall, 97% of subsidies were given out to the people regardless of income level and this has resulted in 71% of fuel subsidy going to the mid-and high-income groups.
Idris also spoke of rampant abuse such as 30% of cooking oil and 70% of liquid petroleum gas subsidies benefiting commercial concerns instead of houeholds.
Malaysia, he said, would likely be a net importer of petroleum by next year at the current consumption rate.
He said the proposed subsidy cuts for controlled items like sugar, flour and cooking oil would be carried out in stages so as not to burden the people.
Subsidies on education, health as well as agriculture and fisheries, the backbone of the rural poor, would continue but the wastage and abuse must be reduced, he said.
Mitigation measures
Pemandu had also recommended a slew of mitigation measures in its proposed subsidy cuts such as cash rebates for motorists in lieu of fuel price increase, discounts for toll users and cash rebates for MyKad and MyKid card holders through post-offices due to high cost of flour, sugar and cooking oil.
"We are reviewing the possibility of introducing a floating price mechanism, mitigation measures and assistance needed to put in place to cushion the impact," said Idris.
"The Cabinet will also be briefed on public feedback received today in regard to the cuts so that they can make the final decision," he told reporters at the Subsidy Rationalisation Lab Open Day at the Kuala Lumpur Convention Centre today.
Idris also said the government would do its best to renegotiate contracts of independent power producers (IPPs) and toll concessionaires, two sectors which came under fire during a panel discussion.
Federation of Malaysian Manufacturers past-president Yong Poh Kon, who was among the panellists, proposed that the government engaged a top-notch legal team to comb through the contracts and also suggested the government waive road tax instead of cash rebates for fuel hikes.
The panel that also included Khazanah Nasional managing director Azman Mokhtar generally agreed the subsidies should be phased out over a three-year period but strongly supported an immediate cut on sugar subsidy.
Mohideen Abdul Kader, vice-president of Consumers Association of Penang, drew applause from the floor when he urged for sugar subsidy to be cut not tomorrow, but immediately, to cut down on rising diabetic cases.
Idris said a poll of 191,592 showed 61% were in favour of the subsidy rationalisation and 66% wanted them reduced between three and five years.
-Bernama
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