Thursday, November 08, 2007

Subsidies: RM35b or RM10b?

UMNO leaders typically attempts to talk a little more sense prior to an election, and this years' UMNO General Assembly, which is likely to be the last one prior to the next general election is no different.

UMNO Youth Deputy Chief, Khairy Jamaluddin, rightly criticised the current subsidy structure where the rich benefits more from the Government's subsidy scheme than the poor.

What was however interesting was when Khairy claimed that:
In all, the government had to foot RM35 billion, or 25 percent of government income, lamented Khairy during the debate on economy and education at the Umno assembly today.
Now, this RM35 billion figure is absolutely new to me. For the last I checked, specifically at the Goverment's 2007 and 2008 budget, the subsidy levels are no where near the purported figure given by the Member of Parliament and possible Minister in the making.

Based on the Budget figures provided by the prime minister's office, the subsidies allocated by the Government amounts to only RM12.2 billion and RM10.2 billion for 2007 and 2008 respectively, as shown in the table below.

Federal Government Operating Expenditure by Object 2006-2008

The question, I have then is, who is telling the truth? If the Government's budget is providing the accurate figure, then why is Khairy sensationalising the Government's budget by more than thrice the original amount? Was it to make it look like the Government's burden is higher than it actually is at "25% of total revenue", as opposed to only 7%? It is to illicit the rakyat's sympathy for the government which has wasted billions of the rakyat's tax payers monies in all manners possible?

Or on the other hand, more worryingly, did the Government published budget figure totally inaccurate and hides the fact that the Government (mis)allocates an incredible amount of funds to subsidise parties of unknown origins?

I've always had my suspicions and skepticisms over the manner by which the Government produces their budget numbers (e.g., the discrepancy of RM8 billion (!) expenditure between the Prime Minister's budget speech versus the published Economic Report), but if the above discrepancy is indeed "true", then it's absolutely shocking!
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