Prime Minister Abdullah Ahmad Badawi today echoed his son-in-law Khairy Jamaluddin who spoke yesterday about the need to rethink government subsidies in certain sectors of the economy.

He told the Umno general assembly in his closing speech that the government would be looking into ways to revamp state subsidies for various commodities.

Abdullah's announcement follows calls by Umno delegates, including Umno Youth deputy chief Khairy, to progressively scrap the subsidies system which is overburdening the government and stifling economic growth.

"As I was saying at the (closed door) briefing, petrol prices are on the rise but the rich and the poor pay the same price. Tak adil. That is not fair," said Abdullah in his presidential winding-up speech.

The prime minister said the government would look at ways of restructuring the subsidies so as to benefit the poor.

"We know we can't avoid subsidies. But subsidies should be channelled only to the needy," he said.

Abdullah said the government is currently footing too much in subsidies. He revealed that this year alone, the government has to earmark RM40 billion for subsidies - the same amount budgeted for development.

"If this subsidy is reduced, then certainly there would be more money to develop the country," he said.

'Some will be unhappy'

At a press conference later, Abdullah however refused to say when prices will go up if petrol subsidy is cut.

"I'm not saying it will be next month but we are looking into it," he said.

To another question, Abdullah conceded that certain quarters would be unhappy with the decision to scrap government subsidies, but he stressed that Malaysians are "understanding people".

Earlier in his winding-up speech, Umno deputy president Najib Abdul Razak said the government would be considerate when bringing changes to the subsidy system.

"We don't want to be a party rejected by the people. That's why when we review the system, we don't want to burden the people," said Najib, who is also the deputy prime minister.

More ribald jokes

Under the current structure, he said the government would have to spend about RM40 billion on petrol subsidy once the world oil price reaches US$100 per barrel.

"In theory, if we could convert the RM40 billion (subsidy) into development allocation, it will amount to RM80 billion and with that, we can have economic growth at nine or 10 percent every year."

Najib had the audience in stitches with a variation of the ribald joke which he made during his speech at the joint opening of the party's Wanita, Youth and Puteri assembly four days ago.

"When (Wanita chief) Rafidah (Aziz) earlier described that Pak Lah (Abdullah) as the cook who had managed to expand the cake, he turned to me and said 'you're the assistant cook'. If the banana cake is very big, you have to find a bigger 'pisang' (banana).

At this point, acting assembly permanent chairman Badruddin Amiruldin chipped in, "You need pisang tanduk'."

"If there's no 'pisang tanduk', then we will use 'pisang turkish'," said Najib, making fun of his cousin, Umno Youth chief Hishammuddin Hussein, who has Turkish ancestry.