NO one likes to pay more for anything, we can safely assume. Be they toll, fuel, electricity, train fares, sugar, rice, roti canai or teh tarik. It is so much better if they are free.
Hence, the ongoing subsidy rationalisation initiative by the government is unlikely to please many of us, apart from toll road operators and mamak shop owners, presumably. Why should we be paying more for the same thing?
But, life has to go on and Federal Government fiscal discipline is a must. It is not often easy to be an adult and to act responsibly, but at some point in our lives, we must.
Subsidy is like living at home with your parents. Even after contributing to the cost of running the house, much of the unseen expenditures are absorbed by parents.
Only when one moves out that the real cost of living materialises — from laundry to meals that no longer wait at the table when one gets home. A person’s true net worth, both in terms of assets and liabilities, gets to be realised as soon as he moves out on his own. Perhaps, the bed is replaced by a mattress on the floor; the air-conditioner with a stand fan; the midnight snack from the fridge replaced by a trip to the neighbourhood restaurant.
Every expenditure suddenly gets magnified, and those invisible to us then, gets realised. We need to quickly grow up.
Similarly, once subsidy is removed or reduced, the true cost of living will soon dawn upon us. Nevertheless, the subsidy rationalisation initiative is not meant to throw us all out to the streets — it is telling some of us who can to start paying for our way.
Incidentally, subsidy is not free. It may mean us paying less, but there is a cost in subsidising products and services. That cost has to be borne by someone, and that someone is us, whether we use the products or services, or not. The piper has to be paid. While we would be able to comprehend people in need of subsidies, it should rankle us when those who can afford are enjoying them, too.
The flat fuel subsidy, for instance, does not make sense. People owning multiple cars, especially the high-end models with monthly consumption running into the thousands, would benefit most from the fuel subsidy as opposed to those with economical cars, scooters and much less, for those using public transport.
Such broad-based regime is obviously not only flawed, but almost criminal to its socialist ideas.
The challenge when realigning subsidies is to make sure those in need are not disadvantaged. The target groups should benefit most, and not the other way around.
Consider, too, the recent toll hikes. It came about because the government would have to compensate toll road owners and operators of hundreds of millions, if not billions of ringgit, if no tariff revision was allowed. Yet, if most of the toll roads are in the Klang Valley, why should someone in Sabah or Perlis need to contribute to the compensation?
It would almost certainly be unfair to them, or those not driving or using toll roads, to be subsidising motorists there.
The issue of compensation is of course unique: a simplistic argument would be why should toll road owners be compensated at all, especially since they are making money from us?
Well, it is important to understand that toll roads are largely private sector initiatives, they carry the attendant risks and rewards, and these companies need to service loans, pay for maintenance and upgrades, as well as operations.
The way I see it, the government is trying a delicate balancing act — we cannot possibly carry on with an inefficient subsidy regime, but at the same time, we need to address the cost of living issues arising from the rationalisation initiative.
There has to be safety nets, chiefly among them is the much derided 1Malaysia People's Aid (BR1M), a cash handout to those identified.
It is taking resources from broad-based subsidies and giving them to the targeted groups. Of course, BR1M has its problems, but its intention should not be doubted. And I think it is disingenuous and rude to suggest that political support of our fellow citizens could be bought for a few hundred ringgit.
Normally, it is not the people’s inability to comprehend the workings of government finances that is a problem, but often half-truths and misinformation spun many times at coffeeshops and through mobile messaging services that are the greatest of enemies of common sense.
Cost of living is also a function of greed: businesses taking advantage of any price hike to justify charging consumers more. While profiteering could be a consequence of subsidy rationalisation, we should not abandon the pursuit of fiscal responsibility because we are not keen to address these opportunists. Addressing profiteering should be our main agenda in addressing cost of living issues.
By the way, can anyone name any business that has lowered its prices now that fuel is cheaper?
The writer is an award-winning columnist