Prime Minister Datuk Seri Anwar Ibrahim (Bloomberg filepix)

KUALA LUMPUR (July 22): Rationalisation of subsidies is part of the government’s initiative to decrease annual borrowing to RM86 billion in 2024, from RM93 billion in 2023 and RM100 billion in 2022, said Prime Minister Datuk Seri Anwar Ibrahim.

He said that in order to achieve the lower yearly borrowing target, the government has to ensure prudent spending, avoid waste, and only borrow when necessary for development purposes, .

“Subsidies rationalisation is a comprehensive effort that covers a broader spectrum (to help reduce the government’s yearly borrowing).

“Other efforts include tackling corruption, and (undertaking a) more efficient manner of enforcing the law, and taxation efforts,” Anwar, who is also Finance Minister, told reporters after delivering his keynote address at the launch of the National Tax Conference 2024, here on Monday.

Also present were Deputy Finance Minister Lim Hui Ying, Treasury secretary-general Datuk Johan Mahmood Merican and Inland Revenue Board Malaysia (LHDN) chief executive officer Datuk Dr Abu Tariq Jamaluddin.

The prime minister said the government is currently mitigating diesel rationalisation and that the issue of implementing the RON95 subsidy rationalisation had not been brought up.

“(Rationalising RON95 subsidies) was not raised, as we are currently dealing with diesel, so providing proper understanding is vital because sometimes, this issue could be twisted.

“But if subsidy rationalisation is not implemented, the country’s revenue will not increase, debt will increase instead,” Anwar said, adding that borrowing is necessary to partly pay for outstanding debt.

He noted that the government does not want to burden the people and if there were any problems with the diesel subsidy, the government should be informed.

Earlier in his speech, Anwar said the government’s current debt-to-gross domestic product (debt-to-GDP) ratio stood at 64%.

“That is too high and it has exceeded the proper limit,” said Anwar.

He said that if this irresponsible policy continues, Malaysia will not achieve the level of investment the country is receiving now, such as the projected GDP growth in the second quarter of 2024, which is 5.8%.