Fahmi: Refining needed to prevent public burden
KUALA LUMPUR: The plan to implement targeted subsidies for RON95 petrol has been delayed due to the need for a more detailed review of the mechanism, says Communications Minister Datuk Fahmi Fadzil.
He said the government is currently fine-tuning every aspect of the policy to ensure that its implementation will not have an adverse impact on the public.
Fahmi said Datuk Seri Anwar Ibrahim had also addressed the matter during the recent government retreat involving MPs.
'The Prime Minister expressed his view that he does not want the implementation of any policy to negatively affect the majority of the rakyat.
'It is this fine-tuning process that has resulted in a slight shift in the timeline,' he told a weekly press conference at Parliament House yesterday.
Fahmi, who is also the government spokesman, said several adjustments had already been made to earlier policies to avoid burdening the people.
'That is one of the reasons why, following the implementation of measures such as the diesel subsidy rationalisation and other efforts, we found it necessary to re-examine the subsidy delivery mechanism.
'In the same spirit of minimising impact, even the expansion of the Sales and Service Tax underwent further refinements after it was announced.
'The same approach applies to policies that have yet to be implemented but were previously indicated including the targeted subsidy for RON95,' he added.
The rationalisation of the RON95 subsidy was initially expected to be introduced by the middle of this year.
Earlier this month, Finance Minister II Datuk Seri Amir Hamzah Azizan said the government was in the final stages of preparing for its implementation.
The move is part of broader fiscal reforms aimed at curbing leakages and ensuring high-income groups contribute more fairly to national revenue.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
31 minutes ago
- The Star
Tackling current business issues
INDUSTRY experts gave tips at the recent Star Outstanding Business Awards 2025 LAB participants on how to navigate the challenging times wrought with geopolitical uncertainties. Then in the second session, the panel of experts explored different methods that small and medium enterprises (SMEs) seek financing outside of the conventional practice of approaching normal financial institutions. The afternoon event, which was held at Menara Star to a packed audience, was attended by Star Media Group chief executive officer Chan Seng Fatt and chief operating officer Lydia Wang. Similar to previous labs, there were two sessions that covered two distinct topics. The first topic explored the challenges that companies face in light of 'The Tariffs and Taxes Aftermath: What is Next for Malaysian Businesses?' Moderated by the Malaysia Entrepreneurs and Development Association president Datuk Teh Tai Yong, the topic was discussed by panel speakers past SOBA winner Mega Fortris Berhad group managing director and group chief executive officer Datuk Adrian Ng, PKT Logistics Group Sdn Bhd chief operations officer Dr Jason Cheah and Malaysia External Trade Development Corporation (Matrade) strategic planning division director Noor Hayati Abu Noh. The speakers discussed the different scenarios that businesses have to confront, from the 25% tariffs imposed by the United States to the expanded Sales and Service Tax from the government as well as instances of supply chain disruptions due to the civil unrest in the Middle East. Ng advised businesses to understand themselves and to draw back until the time is right to scale back up. Noor Hayati both touched on the importance of diversification, either in business or which country to trade with. Cheah urged SMEs that it is time to start looking into environment, social and governance matters as it has a profound impact. The second session, which was moderated by Associated Chinese Chambers of Commerce and Industry of Malaysia treasurer Datuk Koong Lin Loong, gave SMEs enlightening information on 'Raising Funds and Accessing Capital for Business Growth'. Speakers in this session included RHB Bank Berhad SME banking, SME engagement head Sim Ee Chiew, Credit Guarantee Corporation Malaysia chief business officer Sean Tan, PEOPLElogy Berhad founder Allen Lee and Hernan Corporation founder and group CEO Datuk Anna Teo. The panel gave a lively session as Teo declared she rarely approached banks for financing. She asked businesses to be more flexible and explore other possibilities. While banks would be the first step for budding businesses, she said entrepreneurs should network and ask about other alternatives, such as private equities. Tan explained that CGC's job is to transfer the credit risks from a bank to CGC. In the event a business fails, and the SME is unable to pay, CGC will provide the necessary relief. Ng shared his experience of raising funds via the initial public offering route, which he said was 'more challenging because (Bursa Malaysia) wants the public to trust you (hence the need for) transparency.' Sim said that banks do much more than just provide loans, they help enhance cash flow and operation efficiency in order to eliminate idle cash, as well as digitalisation services. Besides the panel discussions, SOBA sponsors introduced their business models and some of their services to the participants. CGC's SME advisory and strategic alliances head Mike Wong talked about some of the services that are available to SMEs that are seeking ways to finance their companies. PKT Logistic's presentation was on the company's diversified range of services, from logistics and education to its own inland port, presented by Cheah. RHB Bank SME business development head Kelvin Chin and U Mobile Sdn Bhd commercial pre-sales section head Lim Swee Mei showcased the services that would benefit SMEs in their businesses. SOBA 2025 is organised by SMG with CGC, PKT Logistics, RHB Bank and U Mobile as main sponsors, Great Wall Motor Malaysia as co-sponsor, and Matrade as the official trade promotion partner. It is audited by BDO while radio stations 988 and Suria are official media partners. For details, call the SOBA hotline at 017-231 1789 or visit Look out for the announcement of the next SOBA LAB 2025, which will be held on Aug 14 at Iconic Hotel, Bukit Mertajam, Penang.
The Star
an hour ago
- The Star
Inflation likely to trend higher from this month
PETALING JAYA: While June recorded a lower-than-expected inflation rate of 1.1% – the lowest in 52 months, the disinflation trend is not expected to sustain in the months ahead. June's headline inflation brought inflation for the first half of 2025 (1H25) to 1.4% year-on-year (y-o-y), lower than the 1.8% recorded in 1H24, indicating continuing disinflation since its peak in 2022. The rise was lower than the 1.2% increase forecast in a Reuters poll. Core inflation during the month was unchanged from May at 1.8%. The effects of the expanded sales and service tax (SST), wage adjustments under civil service reforms and the RON95 subsidy rationalisation initiative in 2H25 continued to pose key upside risks to the inflation outlook. UOB senior economist Julia Goh said headline inflation is expected to trend higher from July because of the potential 'second-round effects' from the expanded SST, despite its limited direct impact, as well as 'low base effects' from the previous year. 'We anticipate upward pressure from key components particularly food away from home and services inflation,' she told StarBiz. Goh said the tax-induced inflation effect is expected to be one-off, but also cautioned that the 'long-anticipated' RON95 subsidy rationalisation initiative remained as a key uncertainty, and 'could alter the inflation path'. 'Nevertheless, we expect full-year inflation to average at 1.8% – which is below Bank Negara's projected range of 2% to 3.5% (2024: 1.8%),' she said. Goh maintained that the inflation outlook remained benign over the policy horizon. She opined that another 25 basis points cut in the overnight policy rate to 2.5% by the end of the fourth quarter of 2025 was plausible should downside risks to growth – particularly from potential tariff actions and geopolitical tensions escalate. 'A more accommodative monetary policy stance may be warranted to support domestic growth into 2026, considering that monetary policy typically takes about a year to exert its full impact on the economy,' she said. iFAST Capital research analyst Kevin Khaw Khai Sheng said although the June inflation data came in within his expectation, the disinflation trend may not be 'sustainable' given measures such as targeted subsidy rationalisation, possible fuel price flotation, and wage adjustments for the civil service. 'We believe that the consumer price index (CPI) has already bottomed out, and an increase is possible in the next one to two months. 'One thing that we are closely observing is the service cost which tends to be sticky. That said, it is not alarming at this juncture, as we have not seen a huge spike,' he said. According to Khaw, the base case is for the central bank to maintain its policy rate in 2H25 given that inflation remains manageable. That said, he noted that an additional rate cut is possible in the event of unprecedented external economic shocks. Meanwhile, Sunway University economics professor Dr Yeah Kim Leng said the disinflation trend could prolong due to a combination of external and domestic factors. Externally, global uncertainties are having a depressing impact on demand which could dampen commodity prices. 'Global commodity prices especially fuels have eased as US global tariffs and geopolitical uncertainties have dampened consumer and business spending. 'They have contributed to the disinflationary trend for most countries except for those facing tariff escalations and the ensuing supply chain shocks,' he said. Yeah said supply chain adjustments to tariff increases would exert upward price pressures although the effects would be uneven across countries since higher import tariffs would raise producer and consumer prices. 'As exports to the United States are being diverted due to unilateral tariffs imposed by the Trump administration, excess supplies in Asia and other regions could also exert downward pressures on prices, thereby prolonging disinflation in these countries including Malaysia,' he said. A stronger ringgit will also ease imported prices. As of the end of June, the local unit has strengthened by over 5% against the US dollar. 'The delay in the RON95 subsidy rationalisation will likewise postpone the onset of a potential source of inflation, although this will likely be offset by higher price pressures resulting from the increase in the national minimum wage and labour shortages in selected industries,' Yeah said. OCBC senior Asean economist Lavanya Venkateswaran said June's inflation figures were weaker-than-expected on account of transportation inflation. She added that the overall inflation picture had been benign with headline CPI averaging 1.4% y-o-y in 1H25, and she had reduced the 2025 headline CPI forecast to 1.5% from 2% previously. 'The inflation prints for 1H25 paint a picture of well-contained price pressures. 'Subdued headline inflation of 1.4% in 1H25 and reduced prospects of RON95 rationalisation, following the government's need for a more detailed review of the mechanism have led us to reduce our full year forecast. We had previously expected a 20% to 25% increase in RON95 prices from October,' Lavanya said. While she had pencilled in another 25 basis point rate cut from Bank Negara for the remainder of the year, Lavanya said it was important to look at the trajectory of core inflation as a gauge for domestic demand conditions. 'Core inflation remaining higher than headline inflation suggests that domestic demand is holding up even as the more volatile components of inflation eased in 1H25,' she added.
Barnama
2 hours ago
- Barnama
Malaysia's Financial Fundamentals Draw IMF Praise
REGION - SARAWAK > NEWS KUALA LUMPUR, July 23 (Bernama) -- Malaysia's financial strength and market flexibility support resilience against external shocks and capital outflows, according to the International Monetary Fund (IMF). These factors, including Malaysia's strong balance sheet, position the country well to navigate global financial volatility without major disruption, the IMF stated in its 2025 External Sector Report, released in Washington on Monday. The IMF said that Malaysia's net international investment position (NIIP) is expected to increase over the medium term, supported by projected current account surpluses. bootstrap slideshow 'Malaysia's NIIP has averaged about 2.6 per cent of gross domestic product (GDP) over the last decade, increasing to 5.4 per cent at the end of 2023, supported by strong current account surpluses during the pandemic that helped increase reserve assets,' said IMF. It highlighted that the NIIP then declined to -0.6 per cent of GDP at the end of last year because of an increase indirect and portfolio investment liabilities. At the same time, total external debt increased to 69.7 per cent of GDP at the end of 2024, compared to 68 per cent at the end of 2023, and remains manageable. One-third of the external debt is denominated in ringgit, which means it is not subject to valuation risks, the IMF noted. Additionally, short-term external debt, making up 42.8 per cent of the total external debt, is considered manageable. The IMF said this is primarily because most of it consists of intragroup borrowing among banks and corporations — an arrangement that tends to be stable — or trade credits that are backed by export earnings. It emphasised that Malaysia's external position in 2024 was assessed to be moderately stronger than the level implied by medium-term fundamentals and desirable policies. After falling in 2023 amid a challenging external environment, the country's current account surplus fell slightly in 2024, as higher intermediate and capital goods imports outweighed higher exports due to an upturn in the global semiconductor cycle, it added.
