With total subsidies amounting to RM10.5 billion, Malaysia could have easily housed, schooled and given medical care, amongst others, to hundreds of thousands of deserving citizens of the country, the rakyat.

Instead, all that the government has forked out, on an annual basis, is enjoyed best by those with a garage full of Ferraris.

Subsidies make up a large part of our daily lives; from the bread we eat to the electricity that runs the air-conditioners in our rooms, not to mention the fuel we get for ‘year end sale’ prices. In 2009 alone, fuel subsidies which includes for petrol, diesel and liquefied petroleum gas (LPG) was at an estimated RM9 billion.

‘Subsidy’ is defined as monetary assistance granted by a government to a person or group in support of an enterprise regarded as being in the public interest. The primary aim is to ensure the welfare of the poor and needy rakyat.

While certain subsidies may have their intended effect to some extent, subsidising a commodity that benefits the rich more than the poor is a defeat of its purpose altogether. The argument that the petrol subsidies help the poor and the needy is fundamentally flawed.

Petroleum subsidies tend to be inefficient in part because they are poorly employed. The higher the household income, the higher the subsidy due to the larger quantities consumed .

In contrast, the question of whether a fuel subsidy really benefits the poor comes to an uncertainty. Do they even own a car or a motorcycle? And does the owner of a RM800,000 vehicle continue to pay the same price of petrol as a 70cc motorcycle owener?

Shouldn’t the government be spending the money on programmes which are more targeted at helping the poor and needy such as better education and schooling environment, healthcare and efficient transportation?

Artificially cheap fuel and power only perpetuates inefficiencies, further weakening Malaysia’s competitiveness. We need to, as a rising community, realise that subsidies are just a quick fix, not a permanent solution.