Targeted subsidies: Ismail Sabri calls for careful planning

 

PARLIAMENT | Former prime minister Ismail Sabri Yaakob today urged Putrajaya to be careful in its plan to implement targeted subsidies, saying that an inappropriate approach may backfire and adversely impact the rakyat.

In debating the government's Budget 2024 Bill this afternoon, he said the idea of targeted subsidies had been considered by many previous administrations but could not be implemented due to many constraints.

These include the time Najib Abdul Razak and Dr Mahathir Mohamad were leading the country between 2019 and 2020.

"But until today, it has yet to materialise. Because it (targeted subsidies) requires a mechanism that is transparent and efficient to ensure that no one (who is eligible) is left behind.

"It is important to have a refined mechanism because subsidies have already 'stuck' in our economy as one of its structural components.

"Government subsidies do not only focus on specific sectors and segments, but they cover all sectors and markets, including the labour market.

"Thus, I would like to ask what is the mechanism that the government will use to implement targeted subsidies next year because there were no details on this in Budget 2024," he said.

Encountered many issues

Ismail Sabri (BN-Bera) questioned the comprehensiveness of Putrajaya's National Utility Data Base, or known by its Malay acronym Padu, which the government plans to utilise in distributing subsidies starting January next year.

He also asked the government how it would define those who are eligible to receive a targeted subsidy and who do not.

For example, Ismail Sabri (above) cited the time he was holding the domestic trade portfolio, when the government tried to implement targeted subsidies for petrol.

According to the former premier, the government then encountered many issues, including how to distribute the subsidy to the intended target group.

"At that time, it was proposed that only those who use vehicles below 2,000cc can get petrol subsidy. But then we received feedback that many imported and luxury cars that cost hundreds of thousands of ringgit were also below 2,000cc.

"So, it means that those who drive expensive cars would still get subsidies for petrol, while there are those living in kampung but drive old Volvo they bought for only RM10,000, and these poor people cannot get the subsidy.

"In the end, many issues like this that we could not get past, and the plan had to be shelved.

"(Because) implementing targeted subsidies without an appropriate mechanism would further burden the rakyat, especially when costs of living continue to increase," he told the Dewan Rakyat.

Similarly, Ismail Sabri warned, the government's plan to rationalise subsidies for diesel next year might also impact negatively on the rakyat.

Should the government stop giving the subsidies, he said, transport costs would increase and this would surely be passed to consumers.

"I hope the government will look into these issues." - Mkini