KUALA LUMPUR, Sept 2 — A panel made up of political analysts and lawmakers say the country is better off with less government subsidies.

Rembau MP Khairy Jamaludin emphasised the urgency of subsidy cuts at last night’s public forum titled “No more subsidy?! What do we do now?”.

“It’s a question of necessity that the BN government or any government has to address subsidy problems now rather than later,” he said, adding that even if the government does not go bankrupt, it will have some serious fiscal problems.

Contrary to the title of the forum, Khairy said he does not think that there will be absolutely no subsidy from the government.

“I don’t think there will be a situation at any time where there will be absolutely no subsidy from the government. I think as long as there is a government, no matter how libertarian the government is, there will be some element of government support,” he said, adding that it was the government’s role.

University College Sedaya International (UCSI) political analyst Dr Ong Kian Ming said subsidies are not sustainable and had to be reduced.

However, he said that just by reducing subsidies alone was not sufficient.

“These subsidies actually distort the market and if they are not implemented properly, people would abuse them,” he said, using heavily-subsidised diesel as an example.

Both Khairy and Ong agreed that the problem with government subsidies was “leakages” and “inefficiencies”.

“There continues to be massive leakages and implementation problems,” Ong said, citing “wasteful expenditures” in a number of sectors.

He cited the Treasury and the Performance and Delivery Unit’s (Pemandu) current projection of the National Higher Education Fund Corporation (PTPTN) loan collection, if it were to continue at its current rate, there would be a cumulative deficit of RM22 billion by 2020.

Wan Saiful Wan Jan, chief executive of the Institute for Democracy and Economic Affairs (Ideas), took an even tougher stance on the subsidy issue.

“Every time we allow the government to pay or to subsidise our expenses, we give away a little bit of our freedom,” he said, calling it a symptom of the “disease of being irresponsible.”

“I see the removal of subsidies as a very important and a very positive step forward. We must reclaim our independence, we must reclaim our ability to look after ourselves.

“We must stop demanding for others to take responsibility for what we want,” Wan Saiful said.

He added that the government’s role was only for defence, judiciary and enforcement of law and that it should have a limited role in everything else.

Khairy said people would be more willing to bear the cuts if they think the government was tightening its belt as well.

“The people expect the government to share the pain as well,” he said.

He stressed that the cuts however had to be done gradually and not with “such a big quantum at one go”, referring to the cuts prior to the March 2008 general election.

Khairy also said that there should be “mitigation” factors to cushion the effect from the subsidy cuts.