By Selangor Journal Team
SHAH ALAM, Oct 19 — The Unity Government announced two major subsidy cuts in Budget 2025, targeting RON95 petrol and education, said Prime Minister Datuk Seri Anwar Ibrahim.
The moves are part of austerity measures aimed at addressing the national debt and curbing excess spending.
He said the targeted subsidies for RON95 petrol will be implemented by mid-2025, marking a significant fiscal reform since the government came to power in November 2022.
[caption id="attachment_376546" align="alignright" width="404"]
Prime Minister Datuk Seri Anwar Ibrahim tables Budget 2025 in the Dewan Rakyat, in Kuala Lumpur on October 18, 2024. — Picture by BERNAMA[/caption]
Currently, RON95 is priced at RM2.05 per litre in Malaysia, far lower than in Thailand (RM5.85), Indonesia (RM3.38), and Singapore (RM9.02).
This subsidy cost RM20 billion in 2023, with 40 per cent consumed by wealthier individuals and foreign nationals.
Reforming the subsidies ensures they reach those who truly need them while preventing misuse by the wealthiest 15 per cent, Anwar said during the budget tabling in the Dewan Rakyat yesterday.
Education subsidies will also see changes. Full boarding schools (SBP), initially for underprivileged students, now have 30 per cent enrolment from high-income families.
Each SBP student is currently subsidised for RM15,000 annually.
Subsidies for wealthier students will be reduced in stages, with savings used to improve the infrastructure for all students.
At the tertiary level, pharmacy undergraduates pay RM3,000 yearly, out of the RM30,000 actual cost. Starting next year, the subsidy will be scaled back for higher-income households.
Since 2022, the targeted electricity and diesel subsidies have yielded significant savings. Electricity subsidy changes saved RM4 billion in 2023, while diesel subsidy reforms saved RM600 million monthly.
The Prime Minister stressed that 85 per cent of the population would still benefit from government subsidies.
The government spent RM80 billion on subsidies, incentives, and assistance last year.
