16th June 2023 - 2 min read
The mechanism for targeted subsidies is not ready as of yet and still needs to be fine-tuned, said the Prime Minister Datuk Seri Anwar Ibrahim. This comes as the government continues its efforts to ensure that such financial aids are going to those who are truly in need of it, instead of being taken advantage of by affluent individuals.
The prime minister explained that there is a dedicated team working on the targeted subsidy schemes and proposals, but he is not yet satisfied by what has been presented thus far. Specifically, he is not fully convinced of the effectiveness of existing proposals, and would like to take time to review them properly before making any announcements.
“Look at the electricity and diesel subsidies. People with Mercedes and Rolls Royce are enjoying this subsidy. If they don’t use it for the main car, they abuse the system to fuel their second car so that’s why we need more time. If it’s ready, I’ll roll it out tomorrow, but for now, we need to work on it further,” said Datuk Seri Anwar.
Meanwhile, back in May 2023, Deputy Finance Minister I, Datuk Seri Ahmad Maslan revealed that the mechanism for targeted subsidies was 75% complete, and that it may be announced during the tabling of Budget 2024. The national budget for the next year is expected to be presented in October.
The issue of targeted subsidies has made headlines over the past few years, especially during the Covid-19 pandemic as the country’s national debt hit a whopping RM1.5 trillion and the government sought ways to better manage its assistance programmes. Anwar’s administration is the latest in line to push for a revamp of the country’s existing blanket subsidy policy, and has, to date, specified that it will implement targeted subsidy for fuel, electricity tariff, and haj – with the benefit withdrawn for high-income households.
More recently, Economic Affairs Minister, Rafizi Ramli, has also announced that the government is set to shift away from the existing B40/M40/T20 income categorisation – which only looks at a household’s income – in its implementation of targeted subsidies. Instead, it will rely on net disposable household income, which takes into consideration a household’s income as well as expenses.
(Source: Malay Mail)
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