Targeted subsidies: Yay or Nay?

04 Jan 2024 11:27am

ECONOMY Minister Rafizi Ramli disclosed that the current national debt stands at RM1.3 trillion, prompting the government to introduce the Targeted Subsidy Programme in 2024 through the Central Database Hub (Padu) system.

While the move aims to curb government debt and redirect savings to development, concerns linger over the lack of clear details about the programme's mechanism.

Positive Responses:

Targeted Subsidies for Low-Income Groups

I agree with the implementation of targeted subsidies as it proves beneficial for those in need, especially within the B40 and M40 categories, who are affected by the high cost of living.

Given that a significant portion of the Malaysian population falls into these groups, continuing this initiative seems reasonable and necessary.

After all, if the government does not target only certain groups as is currently happening, it will cause foreigners and undocumented immigrants (Pati) to take advantage by enjoying subsidies.

This is unfair because they indirectly receive aid that should be allocated for the local people and even the government has to bear the burden of subsidy costs for this group.

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The issue becomes more disheartening when some foreigners or Patis take advantage by reselling subsidised goods at significantly higher prices in the market.

The compulsion for those with no alternative but to purchase along with them results in oppression for our own people.

I hope that through the targeted subsidies implementation, government spending for Malaysians can be directed to those truly in need, excluding foreigners from enjoying the same rights.

While the high-income group or T20 might remain unaffected by these changes, it can contribute to addressing economic inequality in society.- Laboratory assistant, Zakiah Othman, 54

The government's decision to implement targeted subsidies is the correct measure to safeguard the low-income group severely impacted by the high cost of living.

This approach doesn't burden the people, as the benefits are restricted to the rich and non-citizens.

It is fair because the high-income groups that are excluded from receiving this subsidy are already capable and will not affect their purchasing power.

Reducing subsidies can foster economic growth and redirect government spending toward vital services like health and education.

For example, the government can use excess expenditure from the subsidy to upgrade or establish new schools, especially in rural areas.

I also understand that the government will increase the Rahmah Cash Contribution payment rate (Sumbangan Tunai Rahmah or STR) if the targeted subsidy is implemented.

So, there is no problem with the implementation because everything is done for the good of the people in this country as well.

In fact, the government's actions by implementing this initiative can reduce the national debt which is becoming more worrying yearly. - Housewife, Siti Khadijah Mohamad, 29

Negative Responses:

T20 Traders' Concerns

While I see the benefits for the B40 and M40 groups in this initiative, there could be challenges in effectively managing targeted subsidies.

Business establishments may struggle to verify eligibility, and there's a possibility of T20 individuals or foreigners exploiting the system.

Obtaining customer information for subsidy purposes could be easy for stores.

Moreover, this initiative is unfair for the people in the country, as the T20 group should also receive equal benefits like other segments of society.

The distribution of government assistance should be fair, resembling the previous inclusive approach where everyone was eligible for benefits, possibly excluding non-citizens from receiving them.

From a logical standpoint, industrial operators, often part of the T20, may not qualify for targeted subsidies, like electricity, potentially leading to a rise in the prices of goods and services.

This could result in similar or exacerbated effects for the end-users, ultimately causing significant imbalance.

I hope the government conducts thorough research before implementing targeted subsidies, as there is concern it might burden the people rather than assist them. - Private worker, Fais Khalid Shah, 24

In my view, the method of giving subsidies limited to the lower class only will cause many problems because of the different costs of living between the city and, the countryside, and the state.

The disparity in living expenses in major cities like Kuala Lumpur and Selangor compared to states like Kelantan cannot be equitably addressed, given the significant differences in the costs of goods, rent, and other essentials.

For example, a resident earning RM8,000 per month might fall into the T20 category in Kelantan but shift to M40 when residing in Kuala Lumpur.

While targeted subsidies aim to ease the burden on low-income individuals, implementing them proves to be quite challenging.

In today's society, many individuals engage in multiple jobs and side income activities, such as online businesses and e-hailing driving.

Sometimes, their supplementary income surpasses their monthly salary, creating challenges in providing subsidies based on conventional income classes.

Some individuals may exploit this situation.

I hope the government considers all aspects thoroughly before implementing targeted subsidies. Perhaps, excluding this grant for foreigners alone would be sufficient. - Food trader, Aariz Zafran Norazman, 33