By Danial Dzulkifly
KUALA LUMPUR, Sept 12 – Savings accrued through the transition from blanket to targeted subsidies should be used to increase cash aid for low- and middle-income groups, said Titiwangsa MP Datuk Seri Johari Abdul Ghani.
The Umno lawmaker argued a shift in approach by the federal government would ensure aid reaches only the deserving while generating extra savings that could be rerouted to those in need.
He voiced his concerns about the blanket policy for many existing subsidies.
“We must adopt a progressive approach by transitioning from blanket subsidies to targeted ones,” he said when debating the 12th Malaysia Plan (12MP) mid-term review in the Dewan Rakyat today.
“We have been talking about this for a long time and it is timely (that this be implemented under the mid-term review) as we can no longer wait. This is as the country’s fiscal position is in critical condition due to high debt.
“Savings from this (change to targeted subsidies) could be used to give more cash aid to the B40 and M40 groups. At least this way, government spending will reach its intended targets.”
Johari said direct cash aid could help curb public fund leakages and prevent the smuggling of subsidised goods.
He said it is also expected to reduce the government’s fiscal deficit from 5.6 per cent to 3 per cent.
“I genuinely hope with the majority the government currently enjoys, we can finally introduce targeted subsidies.
“Though this may not be a universally popular move, it has the potential to bolster the government’s fiscal position. With this fortified stance, I believe we must endure short-term pain for long-term gain,” he said.
In his speech, Johari said data released by the government showed 40 per cent of existing subsidies have benefited the T20 group.
Prime Minister Datuk Seri Anwar Ibrahim in his Budget 2023 speech revealed Malaysia loses RM10 billion a year over diesel subsidy leakages.