Budi95 shows govt failed to make targeted subsidy system work: Muda

 

The government’s pivot from making RON95 subsidies targeted to 85 percent of Malaysians to giving it to all citizens is a sign of failure, said Muda.

Specifically, the party’s information chief, Leben Siddarth, said it showed that the government had failed to make its targeted subsidy mechanism work.

“The latest decision shows that the government failed to find the right mechanism (for targeted subsidies) and instead chose a populist path that affects the country’s fiscal discipline,” he said in a statement today.

Yesterday, Prime Minister Anwar Ibrahim announced that there will be no income cap on RON95 subsidies, with all Malaysians with a valid driver’s licence able to redeem up to 300 litres of subsidised petrol per month.

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However, up until two weeks ago, the government’s position, as stated by Finance Minister II Amir Hamzah Azizan, was that subsidies would be financially targeted.

Finance Minister II Amir Hamzah Azizan

In remarks at the Senate on Sept 8, Amir said the government was working towards using Central Database Hub (Padu) data to ensure that only those eligible could use their MyKad to get subsidised RON95.

The pivot has resulted in a sharp revision in how much the government expected to save from the subsidy rationalisation - from up to RM8 billion per year previously to somewhere between RM2.5 and RM4 billion, depending on crude oil prices.

‘Limited’ subsidy

Leben quipped that the new subsidy mechanism was “limited” and not “targeted”, as it only excludes foreigners.

“Muda stresses that the government must return to the original principles of targeted subsidies that are fair, transparent, and consistent.

“Such rushed decisions don’t just impact public confidence, but also hurt the government’s ability to manage the economy prudently,” he said.

The Muda leader also voiced concerns about possible leakages from people selling their unused subsidy quotas.

Amir said today that the government has mechanisms in place to curb abuse, including to prevent multiple refuels in a day. - Mkini