19th July 2022 - 3 min read
Prime Minister Datuk Seri Ismail Sabri Yaakob has said that the government is in the midst of formulating a suitable mechanism for its targeted subsidy approach. This is to ensure that the assistance provided is received by deserving groups.
According to Datuk Seri Ismail Sabri, the government needs to fine-tune various aspects of the subsidy mechanism to ensure that the subsidy allocation is not arbitrarily enjoyed by irresponsible parties, as well as foreigners.
“Yes, the government has suffered a massive loss due to untargeted subsidies as all quarters are enjoying subsidies which are meant for a more deserving group, which is the poor,” the prime minister remarked, adding that the government is also currently working on combating smuggling activities involving subsidised items, such as cooking oil.
Datuk Seri Ismail Sabri shared that relevant authorities will carry out audits on manufacturers to prevent such smuggling activities. “The easiest misappropriation (of the subsidies) would be at the repackers level as they were allowed to repack, for example, a tonne of cooking oil, but where was the oil sent, and who were the recipients? These are the details we want to get from the factories,” he explained.
The prime minister further said that the Royal Malaysia Police, the Armed Forces, as well as the Ministry of Domestic Trade and Consumers Affairs (KPDNHEP) will be involved in tackling similar smuggling activities at the national borders.
Additionally, the prime minister stressed that the government is doing its level best to help Malaysians cope with the rising cost of living in the country. For instance, the allocation of subsidies for 2022 has been raised from the original RM31 billion to nearly RM80 billion for this purpose. This includes the subsidy for RON95 petrol (RM27 billion), diesel (RM7.5 billion), liquefied petroleum gas (RM2.6 billion), cooking oil (RM4 billion), and wheat (RM40 million).
“No subsidies have ever been withdrawn. If there were campaigns calling for the government to return the subsidies, they were not true because the subsidies have never been removed since the day they were implemented,” Datuk Seri Ismail Sabri emphasised, adding that the provision of such subsidies has managed to keep the country’s inflation rate at 2.8% – the lowest in Southeast Asia.
On top of that, the prime minister said that the government is also providing cash assistance to the B40 income group via Bantuan Keluarga Malaysia (BKM). Introduced under Budget 2022, the BKM programme offers up to RM2,500 cash assistance to B40 individuals and households. Late last month, the government also announced an additional cash aid of up to RM100 for the BKM recipients. “We will see how the situation is. If we need to increase it (BKM), we will. If the prices of goods are established, we won’t,” Datuk Seri Ismail Sabri also remarked.
To note, the government had also earlier formed a special task force dubbed Jihad Tangani Inflasi to draft strategies and coordinate efforts in addressing inflation within the country. The task force’s chairman, Tan Sri Annuar Musa has assured the public that his team will take proactive measures to maintain the country’s inflation at a low and manageable rate.
(Source: The Edge Markets)
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