By Lee Wei Lian | May 23, 2011 The Malaysian Insider
KUALA LUMPUR, May 23 — Lim Guan Eng continued to pressure the government over subsidy cutbacks, saying that the government should look at the profitability of some of its government-owned businesses first before burdening the public with further price increases.
The DAP secretary-general said in a media statement today that the purported RM116.6 million in savings from raising sugar prices by 20 sen could be more than offset by the RM232 million in profit reported by MSM Malaysia Holdings Bhd, a subsidiary of government-owned Felda Global Ventures Holdings Sdn Bhd. “What is RM116.6 million compared to RM232 million in profits earned by MSM last year?” asked Lim (picture). “Instead of doing its corporate social responsibility to help Malaysians, especially the poor, Felda would benefit from the RM116.6 million extra to be paid by Malaysians.”
Lim said the BN-led government could easily transfer the RM116.6 million cost of the subsidy cutback to MSM since it is owned by Felda.
“Instead, in line with BN’s misguided and corporate-centric policy of helping the rich companies at the expense of poor ordinary Malaysians, BN has chosen to hit the pockets of 27 million Malaysians first than the already huge profits of corporate giants such as Felda or MSM,” he said.
MSM, however, will be listed later this year and is expected to be the largest IPO so far in 2011 and could raise as much as RM900 million, according to media reports.
MSM, which was previously known as Malayan Sugar Manufacturing Co Bhd, recorded a 32 per cent jump in sales to RM2.17 billion in 2010 from 2009, according to its draft prospectus.
Profit, meanwhile, fell slightly to RM232.9 million from RM237.3 million during the same period.
Lim noted that Felda is a statutory body founded in 1956 to alleviate poverty among rural Malays via a land resettlement scheme.
He also repeated his call that for action to be taken to reduce gas subsidies, estimated to be worth RM19 billion annually, to independent power producers (IPPs) rather than reducing diesel and gas subsidies “worth a few hundred million ringgit that hurts ordinary Malaysians.”
The government hiked the price of sugar on May 10 by 20 sen as part of its subsidy rationalisation programme.
Dosmetic Trade, Co-operatives and Consumerism Ministry secretary-general Datuk Mohd Zain Mohd Dom on Monday said that the price increase would save the government RM116.6 million but would not eliminate subsidies completely as it would still be footing a subsidy bill of RM283.4 million.
The government has also been raising fuel prices gradually by about 5 sen in July and December 2010, but significantly below the rate at which global fuel prices have been rising.
It also abolished diesel subsidies for nine categories of commercial vehicles effective June 1.
Lim said the BN government should withhold any further subsidy cuts until IPP gas subsidies themselves were rationalised.