So as usual, KKG is again spreading his attack against the plan to cut fuel subsidy. Politicians like Dyah Pitaloka happily embrace his elaborate take and broadcast it all over. Their argument is, the current budget deficit is not as bad as the government claims, will not explode, and there should be enough money to keep subsidizing the fuel consumption.
Which misses the point. Look, even if we have a budget surplus, the current fuel subsidy is still wrong. This is not about deficit big or small - or even (very unlikely) surplus. This is about misallocation, mistargeting, and misincentive. The budget is misallocated because the money spent to cover the subsidy would have been in better use if otherwise spent on infrastructure development. The subsidy is mistargeted, for the major bulk of it is enjoyed by the top rich. And the subsidy system is suppressing the incentive for the development of renewables, for the environmentally-friendly energy products will not be able to beat the price of the heavily subsidized gasoline.
In short, the current fuel subsidy practice is unproductive, pro-rich, and environmentally harmful. Too bad, the government is also focusing the debate too much on the deficit issue.