Friday, 16 July 2010

Subsidy cuts begin

The main news today centres on the Federal Government starting to remove the subsidy system in the country.

We hear that the subsidy system cannot remain in place forever. It is bound to kill off any country's economy eventually, so the official explanation (propaganda goes).  Reluctantly, for the good of the country, the government says that the subsidies must be reduced. This is the first stage of the process and the prices of some essential items have been increased effectively from midnight. But be braced for more subsidy cuts every six months or so!

I don't know about you but on a personal level, I know that the removal of subsidies is going to affect me. Primarily, it is the increase in the price of petrol by five cents to RM1.85. An increase of 2.8 percent may be minimal but it sure will have knock-off effects on transportation cost and every else that depends on transport! And what doesn't depend on transportation to move goods and foodstuff from one corner of the land to another? Moreover, there's also a hefty 25-cent increase per kilogramme in sugar prices. Sugar does not affect me that much but again, there will be ripples felt from this move. More reason to see food prices increasing soon.

All these are rich fodder for people to criticise the federal government. Already on facebook, I'm starting to see people posting that that's the result of choosing the Barisan Nasional in the last general elections, and that we should be voting for the Pakatan Rakyat in the next one to come. Blah blah blah.... All very predictable reactions.

But, seriously, folks, is there an alternative solution to this subsidy conundrum? I'm no economist, so I don't know at all. If there is anyone who can explain it clearly to me, I'll appreciate it very much!

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