Scrap ‘high leakage’ subsidies like cooking oil, says Mydin boss
Ameer Ali Mydin says it would have less impact on consumers compared to removing subsidies for chicken and eggs.
14/06/2023 (Free Malaysia Today), Petaling Jaya - Retail king Ameer Ali Mydin has urged Putrajaya to consider scrapping the subsidies on cooking oil, while welcoming the decision to maintain subsidies on chicken and eggs.
Ameer said: “We know there is a massive leakage for cooking oil. So we could still spend the RM1.2 billion on chicken and egg subsidies but remove the cooking oil subsidies.”
He said there would be less effect on the consumers compared to removing the chicken and egg subsidies.
Ameer, who is managing director of the Mydin retail chain, said removing poultry subsidies now would lead to price increases of at least 10 sen per egg and between RM1 to RM1.50 per kg for chicken. The increase would burden the lower and middle-income groups, he said.
He called for a review of the subsidy mechanism because of a “very substantial” shortage of eggs of all grades (A, B and C) in the market. “So, maybe the subsidy is there, but the effectiveness of the subsidy is not there.”
Subsidy decision an election move?
However, economist Geoffrey Williams of the Malaysia University of Science and Technology said the decision to maintain the chicken and egg subsidies would delay a market correction and keep prices high.
“The subsidies should not continue, but it looks like their removal has been put off for political reasons, perhaps because of the coming state elections or push-back from companies benefiting from cash received under the subsidy scheme,” he said.
He also said the lack of an expiry date for the continuity of the subsidies gave the government a “very bad look”, reflecting “confusion in aims and ownership of the policy decisions”.
Last Friday, Putrajaya said it would continue subsidising chicken and egg prices after June 30, despite announcing that prices would be floated from July 1 just two days earlier. The government, however, did not state when the subsidies would end.
On Saturday, domestic trade and cost of living minister Salahuddin Ayub said it costs the government RM200 million a month to maintain the subsidies and price control for chicken and eggs.
In April, Azman Yusof, the secretary-general of Malaysia’s domestic trade and cost of living ministry, denied being a suspect in an investigation by the Malaysian Anti-Corruption Commission into overspending on subsidised cooking oil.
Azman was responding to reports that alleged he had spent more than RM9 million in subsidised cooking oil which exceeded the allowed quota. He was also alleged to have axed quotas, and separately, approved cooking oil quotas to two companies with the same registered address.
Separately, the son of former home minister Hamzah Zainudin, Faisal Hamzah, and his business partner, are facing charges of nine counts of submitting fake invoices and possessing more than the permitted amount of subsidised cooking oil.