The implementation of the proposed goods & services tax (GST) and subsidy rationalisation will not impact the lower income group, according to Bank Negara Malaysia (BNM) Assistant Governor, Dr Sukhdave Singh.
Sukhdave said, “As far as the government is concerned, from the aspect of implementation, many basic necessities like food products would actually be exempted from the programme. The GST can be implemented in a manner with no significant loss to their welfare,” upon officiating the “Seminar on the BNM Governor’s Address on The Malaysian Economy & Panel Discussion.”
Sukhdave said subsidies are wasteful and detrimental as even those who do not need it, including non-Malaysians, benefit from it.
“Through rationalising subsidies, we can transfer them directly to the lower income group. It would significantly help offset any negative impact of the subsidy rationalisation on the lower income households,” he added.
Sukhdave also urged small and medium enterprises to adjust to the minimum wage policy as in the long term it would benefit the Malaysian economy and the welfare of the country.
“We went to be a developed economy, but what would it mean if there is unfairness in terms of distribution? The lowest group in our society should be able to earn an income that at least meets their basic needs,” he exclaimed.
According to Sukhdave, the Economic Transformation Programme has played a pivotal role in promotion of private investment in Malaysia and this has impacted the country’s economy in a positive way.