Budget 2023: Govt to announce incentives to enhance nation's fiscal sustainability

He said to address the effects of the rise in prices of basic necessities, the government will continue to implement existing subsidies particularly consumer subsidy covering petrol, diesel, liquefied petroleum gas, cooking oil, flour, electricity, chicken, and eggs, as well as various social aids such as social welfare assistance including Bantuan Keluarga Malaysia.

The total subsidies and social assistance are projected to reach close to RM80 billion for 2022 which is the largest in the country's history, he said.

"This is a huge decision (to determine the subsidies via targeted or bulk), the Finance Ministry examines comprehensively and conduct engagements as best as possible.

"InsyaAllah, soon, during Budget 2023, we may announce the incentives that will enhance the nation's fiscal sustainability," he said.

He said this in reply to a supplementary question from Datuk Mohd Salim Mohd Sharif (BN-Jempol) who wanted to know on the government's subsidy allocation study, whether it will be implemented via targeted or bulk system.

Mohd Shahar said Budget 2022 was drafted based on the crude oil price of US$66 a barrel. At present, the crude oil price is over US$100 a barrel, whereby every US$1 per barrel rise in oil price would give an increase of RM300 million in oil revenue, he said.

"However, due to the existing policies to help the people, we create a ceiling price (RON95) at RM2.05 per litre wherein we have to cover more or less RM600 million (in oil subsidy).

"True there's an increase in the prices of Brent crude and crude palm oil (in the global market)...but we only rake in RM10 billion in revenue from these increases. We still need to add RM40 billion (subsidies)," he said.

Apart from that, Mohd Shahar said the government has also implemented measures to contain the rise in the cost of living for households, among them, by setting the ceiling price for certain food products as well as continuing efforts to enhance the production and productivity of local agriculture activities.

The government will continue to monitor the external factors that would negatively impact on the domestic economic situation to ensure the people's cost of living is controlled, he added.