Why is subsidised 1 Malaysia flour being sold in Singapore?

Media Statement by Dr. Ong Kian Ming, MP for Serdang, and Lim Lip Eng, MP for Segambut on the 2nd of April, 2015

After rice, flour is the most important staple food for all Malaysians.  It is a necessity for basic sustenance and hence its availability at an affordable price is the responsibility of the government.  The flour subsidy programme must be well administered to ensure ordinary Malaysians, especially the poor, can meet their basic food needs.  This is especially crucial in the trying times of the beginning of GST implementation when almost everything is getting more expensive.

In 2014, an estimated RM185 million was spent by the Ministry of Domestic Trade, Cooperatives and Consumer Affairs on subsidizing flour. At estimated RM150 million will be spent in 2015. For every packet of 1kg flour sold at RM1.35, the government paid an additional 0.55 sen in subsidies. (See Appendix 1 below)

We have received photo evidence that the same pack of flour – with the 1 Malaysia Logo and branded as “Blue Key” Flour – was bought in Singapore at SGD2.20 from a shelf of a grocery store in March 2015. This is approximately RM5.94 or more than four times its price in Malaysia. We also note that the same packet of flour which was sold in Singapore also had the price and subsidy paid in ringgit “painted over”.

We have read many reports on the rampant smuggling of subsidized diesel, petrol and other goods on the Malaysian Thai border. It is very concerning that this phenomenon seems to be happening at the Malaysia Singapore border as well.

We call upon the Domestic Trade, Cooperatives and Consumer Affairs Minister, who is entrusted with RM150 million every year to administer the subsidised flour programme, to investigate this matter immediately. In addition, he should explain whether there are loopholes in the distribution of the subsidies to flour millers and/or whole-sellers which allows them to sell this subsidized flour overseas.  Most important is for the Royal Customs Department, which is also the authority in charge of collecting the Goods and Services Tax (GST), to explain how subsidised food items can leak through our borders control so easily.

Appendix 1: Subsidized 1Malaysia flour sold in Malaysia at RM1.35 (RM0.55 subsidy)

Appendix 2: Subsidized 1Malaysia Flour being sold in Singapore for SGD2.20