Prime Minister Datuk Seri Anwar Ibrahim has reassured members of the public that the government will increase the existing Rahmah Cash Aid (Sumbangan Tunai Rahmah) amount to assist them if they are impacted by the ongoing subsidy rationalisation efforts. This is especially the case for those who fall under the B40 category.

That said, Datuk Seri Anwar – who is also the Finance Minister – commented that he is convinced the rationalisation of subsidies will not impact 90% of Malaysians, and that only the 10% of “super rich” individuals and 3.5 million foreign nationals will be affected. If there are adverse effects, however, the government will work to improve the social safety net for the poor.

Datuk Seri Anwar also cited the recent floating of chicken prices as a suitable case study for the potential impact of the ongoing subsidy rationalisation. For context, the government had discontinued the provision of subsidies and price control for chicken meat since November 2023, thereby floating its price. Subsequent to that, however, the selling price of chicken did not see an abrupt hike, remaining roughly the same as the previous ceiling price of RM9.40 per kg.

“The use of subsidies in 2022 totals RM77.3 billion, and covers petrol, diesel, liquified natural gas, cooking oil, flour, and electricity – making it the highest total of subsidies in history. For 2023, subsidies will exceed RM81 billion if not tackled immediately. A targeted subsidy approach will be taken, but the government will have a more effective safety net for the poor,” the prime minister further explained.

Datuk Seri Anwar also stressed that no government can provide such amounts of subsidies on a long-term basis, but the process of retracting the subsidies must be done carefully so that the people are not burdened. As such, new approaches are introduced under various strategies and plans – such as the Ekonomi Madani blueprint, the National Energy Transition Road (NETR), as well as Budget 2023 and 2024 – to help rebuild Malaysia’s economy, he said.

“We have placed policies to drive the (national) economy, but it’s directed towards people’s main issues, that’s why the problems we want to solve first are dilapidated schools and clinics, and to eradicate hardcore poverty,” said Datuk Seri Anwar, adding that the government is committed to changing Malaysia’s economic development approach so as not to sideline people’s interests at lower levels.

Earlier this month, Economy Minister Rafizi Ramli had said that the government is expected to implement targeted subsidies for Malaysians after March 2024. Three mechanisms are currently being considered for the implementation, which will take into account criteria such as an individual’s net disposable income and assets – among other things.

(Source: Malay Mail, The Edge Malaysia)

• TAGS:
• Blanket Subsidies
• Budget 2023
• Budget 2024
• Datuk Seri Anwar Ibrahim
• Ekonomi Madani
• Government Subsidies
• National Energy Transition Roadmap (NETR)
• Rahmah Cash Aid
• Subsidy rationalisation
• Sumbangan Tunai Rahmah
• Targeted Subsidies
• Targeted Subsidy Mechanism