KUALA LUMPUR: Prime Minister Datuk Seri Najib Razak said in 1995, the amount of subsidies was only RM123 million (0.24 per cent of Budget) but in 2012, the amount rose to RM24.8billion (9.8 per cent of Budget).
He pointed out that bulk subsidy was a burden and led to leakages, hence, the government replaced it with targeted subsidy which would benefit those truly in need.
As such, the need for subsidy rationalisation which, together with the implementation of the Goods and Services Tax (GST), gave the Government money to spend at a time when income from other sources had reduced.
Najib said the government lost RM30billion in revenue due to drop in global oil prices.