Nurul Izzah, who co-chairs the secretariat of the special advisory body to the finance ministry, said the rationale for fuel subsidies is noble and important, but time has proven that such subsidies are counterproductive.

“Look at the evidence. Last year, we spent RM52 billion on fuel subsidies. That was 74% of total subsidies, translating to 2.9% of our gross domestic product (GDP).

“This is in contrast to our healthcare operating costs, which were only 1.7% of GDP,” Nurul Izzah said in her opening speech at the Youth Economic Forum in Bank Negara Malaysia.

The PKR vice-president also compared fuel subsidy expenses with last year’s development expenditure (RM99 billion), and said that the money could be channelled into development funds.

“Development expenditure matters because it’s about the expansion of healthcare and education, and is where economic potential takes place. Imagine the substantial loss in opportunity costs,” Nurul Izzah said.

The former Permatang Pauh MP added that as Malaysia’s economy matures, the public sector needs to enable proper redistribution of public wealth, and also needs to be reviewed regularly to ensure they meet their targeted objectives.

Nurul, who is Prime Minister Anwar Ibrahim’s eldest daughter, also said she is currently “grappling” with four major issues with advisory panel chairman Hassan Marican.

The issues are the structuring of subsidy rationalisation, increasing the government’s revenue base while dealing with ballooning operating expenses, determining the relevance of government-linked companies (GLCs) in the current economic context and the need to consolidate them, and ensuring the national debt is kept to a manageable level.

During the tabling of the 2024 budget on Oct 13, Anwar, who is also finance minister, said the government will rationalise fuel subsidies in phases.