PETALING JAYA: An economist has criticised the use of e-vouchers and e-wallets for targeted subsidies, labelling it “stupid”.
Geoffrey Williams of the Malaysia University of Science and Technology said such e-wallets would be inaccessible to the lower income group and that the system could be prone to corrupt practices.
“Despite hearing about the importance of targeted subsidies many times, we still don’t have a solution.
“The most recent discussions involved targeting specific products through e-vouchers and e-wallets but this is by far the most stupid idea and most stupid way of targeting subsidies,” he said at a forum titled “Pathway to a Better Future Malaysia”.
Williams said subsidised items were likely to be sold in big supermarkets as these stores accepted e-wallet payments while smaller businesses or neighbourhood convenience stores would miss out on the subsidies. Those in the lower income group, he said, would suffer from this as they tended to shop at their neighbourhood stores.
He added that there was also the opportunity for corruption within the system with government officials or businesses making money at the expense of the needy.
Williams called on the government to implement cash transfers instead. “Simple cash transfers put money in the people’s pockets for them to spend as they choose.”
He said this could be done overnight as the government already had the data of recipients through its various aid schemes.
Earlier this month, finance minister Tengku Zafrul Aziz said it was too early to make a decision on introducing targeted subsidies in the coming 2023 federal budget. He said a decision could only be made if the economy improved and inflation was controlled.
Putrajaya currently subsidises the prices of chicken, eggs and electricity with a targeted subsidy mechanism for petrol also in place. - FMT
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