Why was the goods transport subsidy for Labuan ferries stopped in 2016?

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The Goods Transport Subsidy for Labuan Ferries Was Stopped Due to a Failure to Reduce Island Prices

The federal government ceased the subsidy for transporters of goods utilizing ferries to Labuan in 2016 because these transporters did not pass on the cost savings to consumers, failing to reduce the price of goods on the island. This decision contrasts with the continued allocation of RM11 million annually for the passenger sea travel subsidy, which has been in place since 2014.
Rationale for Halting Goods Transport Subsidy

The subsidy for goods transporters was discontinued after an evaluation indicated that the intended benefit of lower prices for goods on Labuan Island was not materialising. The government's objective in providing such subsidies is typically to improve affordability and stimulate economic activity, and in this instance, the mechanism failed to achieve its desired outcome for consumers.
Continuation of Passenger Travel Subsidy

In contrast, the RM11 million subsidy for passenger sea transport remains in effect for the current year. This subsidy, initially implemented in 2014, aims to alleviate the financial burden on Malaysian citizens travelling by sea between Labuan and various destinations in Sabah and Sarawak.
Subsidised Sea Travel Routes

The passenger travel subsidy covers several key sea routes, including Labuan-Menumbok-Labuan, Labuan-Kota Kinabalu-Labuan, Labuan-Sipitang-Labuan, Labuan-Limbang-Labuan, and Labuan-Lawas-Labuan. These routes are crucial for connectivity and are utilized by a significant number of commuters.
Importance for Lower-Income Commuters

Datuk Rozman Isli, the Member of Parliament for Labuan and Chairman of Labuan Corporation, highlighted the importance of maintaining the passenger subsidy. He noted that many individuals who rely on ferry and speedboat services fall into the lower-income category, and the subsidy directly lessens their travel expenses. Rozman has expressed hope for the subsidy to become a permanent fixture, believing it can contribute to stimulating Labuan's economy.

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Why was the goods transport subsidy for Labuan ferries stopped in 2016?

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