Yeah Kim Leang, the former chief economist of RAM Holdings Bhd, said he hoped the new government would not fully subsidise fuel.
The PH election manifesto promised to help stabilise fuel costs and introduce targeted fuel subsidies for vehicles with a lower power output.
The previous Barisan Nasional government, which removed fuel subsidies and implemented a managed float system for fuel prices, defended its decision by arguing that subsidies had failed to reach the poor, who were the intended target.
Yeah also cautioned the government on its intention to abolish the goods and services tax (GST), which he said most economists did not recommend.
“But since that is what the public wants, the government would need to inform the private sector in the coming weeks on the method of implementation,” he told FMT.
However, Yeah supported Prime Minister Dr Mahathir Mohamad’s decision to form a smaller Cabinet than that of the previous government.
He said consolidating ministries could cut expenditure and reduce waste, which would offset any decline in revenue due to the abolition of GST.
Yeah urged the government to focus on creating high-value jobs and boost business confidence to attract high-tech industries.
“People need to be trained and a conducive business environment is needed so that investors will have the confidence to invest and expand their business.
“Companies should be able to use the latest technology to move up the value chain which will then enable them to pay higher wages to employees.”
He advised the government to gradually reduce the number of foreign workers to prevent any adverse impact on the economy caused by a drastic cut.
He said the previous government had given 1.85 million as the number of registered foreign workers.
However, there were no official figures for illegal workers which some claimed were double the number of registered workers, he added.
Yeah said the reduction in the number of foreign workers should be done by introducing greater automation and gradually replacing them with local workers.
Economists have blamed the ready supply of cheap foreign labour for contributing to the country’s stagnant and low wages.
Yeah also said the present minimum wage would need to be raised gradually, otherwise employers would feel the pinch of a sudden spike in production cost.
The present minimum wage is RM920 for Sabah and Sarawak and RM1,000 for the peninsula.
The PH manifesto promised to increase the minimum wage to RM1,500 within the first term of its government to raise the standard of living.
Yeah said the government must also roll out a clear strategy for the public sector to follow and to strengthen governance.
The government should also encourage a free press to provide checks and balances, and to educate the public, he added.