KUALA LUMPUR: The government needs political commitment in order to affect a change in fiscal policies.

Datuk Seri Johari Abdul Ghani (BN-Titiwangsa) said he agrees with the government’s strategy to change the country’s economic structure, including its fiscal policies.

He said targeted subsidies would allow Malaysia to be able to manage its fiscal policies in stages, but this would not be possible without political commitment.

“As a government which has a relatively small income of RM290 billion, we spend about 22 to 25 per cent on subsidies. This is, of course, a high amount.

“If it is high but (the subsidies) make it to the targeted groups (which need it), this would be alright, but if our system leads to a lot of leakages, this has a huge impact. (If) we can get over this problem, it will give us a strong standing for a good fiscal policy,” he said.

Johari said this when interjecting during Economy Minister Rafizi Ramli’s winding up speech for the debate on the 12 Malaysia Plan (12MP) mid-term review at the Dewan Rakyat today.

Rafizi, meanwhile, admitted that the big shift which was needed to strengthen the country’s fiscal standing was the introduction of targeted subsidies.

“Many members of parliament have given their views on this in the mid-term review and, insyaAllah, an announcement will be made in the near future if Titiwangsa (Johari) is worried about political commitment (in this case).

“I am confident that this unity government is a government that will do the right thing by completely changing the targeted subsidy policy.

“The implementation of targeted subsidies using the Malaysian Main Database (Padu) will minimise the overlaps in the distribution of aid and subsidies from the various agencies and, at the same time, allow for a more accurate determination of target groups,” he said.

Source : NST