Review subsidy mechanism based on accurate data, says Johari

 

Johari Ghani said the government must have reliable and accurate data to ensure targeted subsidies reach their intended recipients. (Bernama pic)

PETALING JAYA: The government must ensure it has accurate data before embarking on any programme involving targeted subsidies, says former second finance minister Johari Ghani (BN-Titiwangsa).

“At this stage, we must ensure that we have accurate data. We must ensure we have reliable information.

“Only then can we channel the subsidy in a manner which cannot be manipulated, such as through direct cash transfers,” Johari told the Dewan Rakyat.

He added that cash transfers represent the best method for ensuring that assistance reaches those who are in need.

“The current subsidy system is regressive because it benefits high-income groups and exposes itself to wastage through misappropriation and the smuggling of fuel out of the country,” he said.

Johari added that a proper mechanism would also allow the government to channel subsidies in a timely manner to those in critical sectors, such as farmers.

“Although the government already provides subsidies to some of them, the aid may not reach them due to leakages. Hence, we need to ensure that it is distributed fairly,” he said.

At the tabling of the 2024 budget on Friday, Prime Minister Anwar Ibrahim announced a shift away from blanket subsidies to a system that mainly aids lower-income groups.

The government subsidises petrol, cooking oil and rice among other items. Government expenditure for these items has climbed to record levels in recent years due to higher commodity prices. - FMT