PETALING JAYA, Oct 28 — It was an announcement which was met with lukewarm response.

In fact, many were now debating how the mechanism would be put in place after the government yesterday revealed those who earned RM10,000 and above would not enjoy fuel subsidies.

The government had also announced entitlement for each car would be based on the registered owner of the vehicle.

Consumer groups however, expressed concerns over the potential abuse of the proposed method which could be used to regulate the system, as well as privacy issues that could arise.

Malaysian Consumer Association secretary-general Datuk Amarjit Singh was baffled with the justification of providing partial subsidy for those who earn between RM5,000 to RM10,000 a month. He further questioned the decision to rush the implementation “just for the sake of subsidy rationalisation”.

“It would be a struggle for families with children who depend on RM6,000 monthly,” said Amarjit.

“The income tiers should be adjusted to those struggling financially.

“The proposed mechanism that the entitlement for each car be based on the registered owner of the vehicle could lead to people registering their vehicle under the names of those entitled to the subsidy.”

Amarjit also questioned how the government plans to implement the system as talks of MyKad being used to facilitate the process have been making its rounds.

“Using the MyKad could pose a significant data risk for the individuals, especially if it integrates with the individual’s Inland Revenue Board data,” he said.

He was responding to a fuel subsidy rationalisation scheme which will be implemented next year. Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah had yesterday said the scheme will be divided into three tiers depending on the monthly income levels.

The first bracket would consist of individuals who earn less than RM5,000 per month (eligible for a full subsidy), while the second bracket would consist of individuals who earn RM5,000 to RM10,000 (eligible for a partial subsidy).

The third bracket, consisting of individuals who earn more than RM10,000, would not be eligible for any subsidy.

Consumers’ Association of Subang and Shah Alam president Jacob George said the classification of the income brackets was a short-handed, knee-jerk reaction by the Finance Ministry, especially given the purchasing power disparity between those living in rural and urban areas.

“Many are going to be upset when the system is implemented,” said Jacob.

“On paper, a person may appear well-off earning RM10,000 a month. But is it truly the case, given the high cost of living in the city?

“By exposing their income levels to the public via their MyKad, consumers would be made vulnerable and could become potential victims of theft.”

However, Federation of Malaysian Consumers Association chief executive officer Datuk Paul Selvaraj said the tiers were necessary for the government to implement the subsidy system successfully.

“There must be a be a cut-off point for those who need the subsidy, and the right group who deserve subsidies would be those earning RM5,000 and below,” he said.

He agreed that the government’s rationale for entitlement for each car to be based on the registered owner of the vehicle could also be subject to abuse as a person with high income could register the car under the name of a family member earning less.

“If a card system is used to monitor the implementation, it must be ensured that data held in such a card should be restricted to contain only the tier status of the holder,” he said.

“Consumers would be averse to using the MyKad as it contained personal information.

“The public will also come up with many creative ways to beat the system, and we hope the government will be able to iron out such issues during the roll-out phase.”

The tiered system is expected to relieve some of the costs associated with the nation’s fuel subsidy system, which has been said to be expensive and inefficient.