Posted on 28 October 2013 - 06:46pm
Last updated on 28 October 2013 - 11:09pm
KUALA LUMPUR (Oct 28, 2013): The government should liberalise the sugar industry and remove the monopoly to allow the free market mechanism to operate, Opposition leader Datuk Seri Anwar Ibrahim said.
He said the government's move to cut sugar subsidy will only benefit two main companies and that the revenue in the sugar industry had increased due to the monopoly.
"What becomes the question here is why must corporations get so much profit due to the removal of sugar subsidy while the people are burdened with the increased sugar price," questioned Anwar in his speech on the 2014 Budget tabled by Prime Minister Datuk Seri Najib Abdul Razak last Friday.
Najib had announced the abolishment of the RM551.25 million sugar subsidy in the Budget.
He had reasoned that many Malaysians under the age of 30 were diabetics and thus such a move would encourage more people to practice a healthier lifestyle.
Anwar also chided Najib's statement by saying such statements were not factual.
"If that's the case, then the subsidy for rice should be reduced as well because carbohydrates also contributes to diabetes."
Anwar said the government's move to implement the Goods and Services Tax (GST) will also further contribute to income inequality and will widen the gap between the rich and the poor.
"GST is regressive. It can be the main cause of inflation," he said.
Citing a study by CIMB Research, Anwar argued that the implementation of GST will contribute to a 5% increase in inflation due to lack of enforcement laws.
Najib, in his budget speech, had also announced the introduction of GST at a 6% rate beginning April 1, 2015.
Meanwhile, Kinabatangan MP Datuk Bung Mokhtar Radin, during the debate on the Budget, suggested that the government introduce GST at a lower rate.
"I propose the government introduce GST at a rate of 5% because this is something new and you don't want to shock the people with the high rate," he said.