Urban poor earning below RM3,000

The government is going to kick start a mechanism to provide assistance to those earning RM3,000 monthly and below. It is still unclear yet whether it would it be simply an aid to "the poor" or reduce the subsidies enjoyed by high-income earners.

Why did they set RM3,000 as the standard? I believe that the Finance Ministry has its own calculation.

Take a white-collar urban worker earning RM2,900 a month as an example, he has to spend at least RM500 on petrol and vehicle maintenance fees. He has no choice but to drive due to inconvenient public transport. Also, he has to spend RM600-RM700 on vehicle loan and RM1,100-RM1,200 on housing loan. After paying all the bills, he has only a few hundred ringgit left for living expenses. He has difficulties to support his children's educational expenses and it is impossible for him to lead a quality life.

These so-called urban middle-income earners are in fact the poor bearing the greatest pain. At least low-income earners in rural areas need not to bear high transportation and accommodation expenses. They can still leave a leisure life without pressure.

Therefore, although a monthly income of RM3,000 has exceeded the Malaysian per capita income of US$7,000, they have been categorised as the target group waiting to be rescued under the coming Budget.

Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said that the government has identified three options, which is now being studied by Performance Management & Delivery Unit (Pemandu). He also mentioned about compiling all those earning less than RM3,000 per month in a database.

What are the three options? It might be a one-off fund allocation, food stamps or to increase the subsidies enjoyed by the disadvantaged group. According to the New Economic Model (NEM) report, the average income of 40% workers is below RM1,222 and up to 80% workers is below RM3,000. Among the total 12 million employed population, 80% means 9.6 million and if the government issues a monthly assistance of RM200 for each of them, it would be RM1.92 billion. The government would not afford it for long. Therefore, it has to find ways to increase income.

As we can remember, the Pemandu has repeatedly proposed reduction in subsidies, including imposing a fuel consumption tax to reduce the deficit and avoid national bankruptcy.

Pemandu has also recommended that the government should develop a subsidy programme for the low-income group. For example, providing a cash rebate for motorbikes below 250cc and cars below 1000cc, amounting to RM54 and RM126 per annum respectively; and a cash rebate of RM20 to MyKad/MyKid holders through post-offices for the first year.

Would the Pemandu make a "Robin Hood" proposal which could aid the vulnerable group while relieving the burden on the treasury?

Malays and Orang Asli have accounted for 76% of the low income group. It is politically correct to assist them and a good preparation for the next general election.

I believe that the assistance mechanism would be activated before the next general election while measures of increasing the treasury's income would be started only after the election. Just like the implementation postponement of the Goods and Services Tax (GST), politics has always been the top priority.

- Today