KUALA LUMPUR: The government should implement cost-saving measures to help finance some of the additional expenses related to subsidies for the welfare of the people, according to the Ministry of Finance (MoF).

In the Malaysian Treasury Circular - Guidelines on Public Expenditure Savings, the MoF revealed that the increase in existing subsidies especially petroleum products and cooking oil as well as new subsidies such as electricity and poultry had contributed to the increase in government spending.

Treasury secretary general Datuk Seri Asri Hamidon said expenditure on aid and subsidies was projected to reach RM77.7 billion compared to the RM31 billion allocation approved in Budget 2022.

"In line with the government's decision to increase aid and subsidy expenditure for the welfare of the people, the government needs to make savings on the operating allocation to help cover part of the subsidy increase.

"Therefore, ministries/ departments/ agencies should restructure the allocation and propose savings in the operating allocation for the MoF to achieve the target of at least five per cent savings from the remaining operating allocation in 2022," he said.

He said the MoF would finalise and issue a Restriction Warrant to inform the amount of the reduced allocation.

"The additional need for these critical and urgent matters will also be met through savings on existing allocations either through trade-offs or the abolition of programmes that do not have a significant impact on the people.

"Applications for additional allocations to cover any non-critical needs will not be considered," he added.

In this regard, officers need to review existing programmes/activities to accommodate new programmes/activities on a trade-off basis with programmes/activities that are no longer relevant or found to be ineffective to the target group and the goals to be achieved, he said.

Asri said action to review the existing programme/activity should be taken before submitting a new programme/activity for the consideration of the Cabinet or MoF, while the savings to be obtained should be taken into account when making a proposal.

The controlling officer must closely monitor the revenue and expenditure made so that they do not exceed the allocation after the annual accounts are closed, he added.

-- BERNAMA