Dr Subra backtracks on GST stand

Anisah Shukry

| November 7, 2013

With the initial denial that GST will have an impact towards healthcare costs, the Health Ministry now says it is looking into ‘minimizing’ the GST impact.

PETALING JAYA: After reportedly assuring that healthcare costs will not rise due to the goods and services tax (GST), the Health Ministry today backpedalled and pledged instead there would be “no substantial increase”.

Health Minister Dr S Subramaniam said that talks with the Finance Ministry on “minimizing” the impact of GST on increasing healthcare costs were ongoing.

“Please be rest assured that the Health Ministry will continue to play a pro-active role in minimizing the effects of GST on essential health services so as to ensure that all Malaysians, particularly those in the low income group, will continue to have access to affordable health care.

“Towards this end, we are continuously engaging with the Finance Ministry and looking at all possible angles on how this could be achieved,” Subramaniam said in a statement today.

However, the minister’s statement contradicts with numerous news reports in which he apparently maintained healthcare costs would not be impacted whatsoever by the GST, as it is exempted from it.

This lead to backlash from DAP leader Tony Pua, who pointed out yesterday that despite healthcare being GST-exempted for the public, hospitals would still be charged with the 6% GST by their suppliers.

This meant hospitals would have to raise the prices of their products and services so that the public may absorb the increased costs, the Petaling Jaya Utara MP said.

He speculated that patients may see a 7.3% increase in price of drugs after the GST is implemented.

“The Health Minister, and many other Barisan Nasional leaders are obviously either ignorant about what is meant by GST-exempt, or chose not to be truthful about it,” Pua had said in a statement.

But Subramaniam today said he believed Pua had received the wrong impression, as the former’s explanations had not been conveyed in full by the media.

“In my response to the questions by the press, I had stated that health services were GST-exempt and the government was committed to ensuring that there would be no substantial increases in the cost of healthcare even after the implementation of GST,” said Subramaniam.

He also urged the public to stop speculating about the possible impact of the GST on healthcare costs, pointing out that the implementation would only be in 2015 and discussions between ministries were still ongoing.