PETALING JAYA: There is no need for more targeted subsidy schemes if Malaysia can roll out a Universal Basic Income scheme, says an economist.
Malaysia University of Science and Technology economics professor Geoffrey Williams said the government can look into providing a monthly Universal Basic Income scheme to help Malaysians in need.
“There’s no other targeted subsidies that should be introduced apart from electricity prices and tiered prices for petrol.
“However, the government can provide targeted social assistance to make the cost of living more affordable,” he added.
Prof Williams said the previous assistance scheme (Sumbangan Tunai Rahmah), which was paid out on Jan 17, had cost RM1.67bil.
“If this is continued in Budget 2023 and paid each month as a Universal Basic Income scheme, it would cost RM20bil – which is within the current budget,” he said, adding that it would be more financially viable than providing more subsidies.
He said that further price controls and subsidies would be harmful to the economy as they would be costly and could cause market distortions as well as supply shortages.
In his Royal Address at the Dewan Rakyat yesterday, the Yang di-Pertuan Agong expressed concern over the hardship faced by those in the B40 group.
The King spoke about taking a more holistic approach in dealing with the rising cost of living.
Prof Williams said the government had made swift decisions that would help the people cope with the cost of living.
“For example, freezing electricity tariffs, bringing forward the assistance payments and beginning to open up markets to competition.”
He also noted that the central bank had paused interest rates so that credit costs would not rise.
“Inflation actually peaked in August last year and is now on a clear downtrend,” he added.
Consumer Association of Penang (CAP) education officer NV Subbarow said the government through the Menu Rahmah initiative had helped a lot of people since its inception, including university students.
However, he urged the relevant ministries to also continue ensuring that prices of necessary goods were controlled.
“Make sure only people in need get subsidies,” he said.
Kuala Lumpur and Selangor Indian Chamber of Commerce and Industry president Nivas Ragavan said the King’s concern for the rakyat was clearly reflected in His Majesty’s speech yesterday that touched on economic empowerment and human capital development to boost economic recovery.
He urged the government to continue prioritising targeted assistance in any form to the lower (B40) and middle (M40) income groups, who comprised 80% of the population.
“Any incentives, subsidies or (cash) handouts from the government should have a targeted approach,” he said.
He also said the business community was looking forward to grants to help them grow their business, aside from human resource training.
