“Targeted subsidies a challenge but necessary,” says Johari Abdul

FORMER second finance minister Datuk Seri Johari Abdul Ghani underscored the crucial need for implementing targeted subsidies to reach the intended groups that need assistance.He was responding to concerns raised by some regarding the cost and effectiveness of the implementation of such a programme.The government’s subsidies, including those for fuel and food, are projected to cost the country RM81 bil this year.“(Implementing) targeted subsidies is not an easy (task), but it needs to be done since the amount of subsidies given by the government in a year has reached RM81 bil. For example, the government has allocated RM50 bil to subsidise fuel for the public, yet only 14 percent of people in the B40 income group have benefited from it.“Therefore, the government needs to find a way to address this matter,” he told reporters after attending the launching of White N Black Aquasports by My Legacy Entertainment Sdn Bhd here today.Last month, some analysts and economists said the targeted fuel subsidies could hit the middle-income group (M40s) the hardest.They noted that the top 20% of income earners (T20) will be better able to absorb the higher fuel costs, while the bottom 40% of households (B40) will be eligible for handouts to buffer the resulting higher inflation.The rollout of targeted subsidies will be done through the government’s Central Database System (Padu), which is 60% complete with a targeted launch date in January 2024. – Oct 28, 2023


Main photo credit: The Edge Markets

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