Gerakan fully supports the implementation of NEM and government’s proposal for a gradual reduction and eventual abolition of the subsidies which amount to RM74 billion a year, particularly those on petrol and sugar.

Gerakan acting president Dato’ Chang Ko Youn said subsidy is a distortion of the market and very costly to maintain and administer.

However, the Government must go to the ground to explain the rationale in the proposal and Gerakan will assist the Government on such effort to secure the future growth and prosperity for our future generation, he said.

“We believe that subsidy has created red tapes and unnecessary administrative machinery, besides causing corruption, leakages and smuggling,” said Chang in a statement.

Chang said it is well known that Malaysian petrol, sugar, cooking oil and flour are sold openly in Indonesia and Thailand. “There is a big price gap betweenMalaysia and our neighbours as a result of which it is a lucrative business to smuggle the products to the neighbours at our expense.”

He said it is timely to stop the abuses and let market forces dictate prices. This is clearly advocated by the International Monetary Fund.

Chang said Malaysians must learn to adapt to market forces as the case in Thailand. However, wary of the hardship faced by the low-income group, the Government must come out with a scheme to assist them such as giving out welfare assistance and food and petrol coupons.

“By adopting the welfare assistance and coupons system, we are sure the taxpayers’ money will be fairly and justly spent on deserving people. To prevent adverse repercussion on the society, the removal of the subsidies must be done in a gradual manner as announced by the Prime Minister’s Department on May 27,” he said.

“At present, the subsidy benefit is actually enjoyed by the rich more than the poor people. Big cars tend to consume more petrol than the smaller ones. Rich people consume more than the poor. Such scheme is unfair to the taxpayers who are subsidising the rich rather than the poor,” he added.

On a separate issue, Chang urged the government to stand firm on its decision to implement the New Economic Model (NEM), which stresses on competitiveness and social justice regardless of race.

He said Gerakan was disappointed with Perkasa for asking the government to distribute the country’s wealth according to race ratio, as in long run that would only harm the welfare and interest of the poor.

“Without growth of wealth, how are we going to distribute?“Chang asked.

He maintained that the market friendly and need-based affirmative action proposed under NEM is a far more better and fair system.