Malaysia
PM Anwar: Putrajaya still working on mechanism for targeted subsidies, current proposals unsatisfactory
Prime Minister Datuk Seri Anwar Ibrahim says he is still unsatisfied with some of the proposals and suggestions made for the new scheme so far, and wants to make sure it is reviewed properly before making any announcement. — Picture by Yusof Mat Isa

KUALA LUMPUR, June 15 — Prime Minister Datuk Seri Anwar Ibrahim said today that the mechanism for targeted subsidies is still being scrutinised and fine-tuned, as Putrajaya aims to cut off aid to more well-off Malaysians.

He said he is still unsatisfied with some of the proposals and suggestions made for the new scheme so far, and wants to make sure it is reviewed properly before making any announcement.

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"Targeted subsidy means it's for the people, not the very rich. At the moment things like Tabung Haji or electricity we're giving to all including the rich. Give it to the needy instead.

"There is a team working on these subsidy schemes and proposals but we're not fully convinced with its effectiveness,” he said today when met by reporters here.

"Look at the electricity and diesel subsidies. People with Mercedes and Rolls Royces are enjoying this subsidy. If they don't use it for the main car they abuse the system to fuel their second car so that's why we need more time. If it's ready I'll roll it out tomorrow but for now, we need to work on it further,” he added.

Last month, Anwar's deputy in the Ministry of Finance, Datuk Seri Ahmad Maslan, said the mechanism for targeted subsidies was 75 per cent complete and may be announced during the presentation of Budget 2024 scheduled for October.

Ahmad previously explained that the government’s move to stop several subsidies for the top earners in Malaysia was an attempt to rectify its past policy mistakes, and the current administration is not aiming to be populist.

Anwar also said that his administration will continue to look for methods to ensure subsidies are provided fairly to targeted groups, and that the B40 group will continue to be given attention in the provision of subsidies.

His administration has so far announced that the so-called top 20 per cent income earners or T20 would not get access to subsidies of fuel, electricity tariff and Haj from last year.

However, a huge disparity in who counts as T20 across the country has since fuelled debate on how Putrajaya will classify who belongs in the T20 group that would no longer receive such subsidies.

Economy Minister Rafizi Ramli previously announced that the government is planning to move away from using the B40, M40 and T20 income classifications to make decisions on matters such as subsidies — but will instead be implementing a metric using "household net disposable income”.

There is no timeframe yet as to when this will be announced.

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