PUTRAJAYA: Savings obtained through the implementation of further targeted subsidies could see the middle-income group getting more benefits, says an economist.
Sunway University’s Prof Dr Yeah Kim Leng said the subsidy savings can be reallocated to other government expenditure for the middle-income group including healthcare, upskilling and even training.
“The lower income groups, meanwhile, will continue to enjoy access to subsidised education, utilities and other goods and services,” he said, adding that these groups would also still benefit from other forms of social assistance, including cash transfers.
Yeah explained that the shift from broad to targeted subsidies is essentially about removing subsidies from those who do not need or can afford them, while redirecting it towards the poor and needy.
“It is a universal policy recommendation to reduce fiscal burden, enhance spending efficiency and improve resource allocation,” he said.
He was responding to Prime Minister Datuk Seri Anwar Ibrahim’s statement that Budget 2025 would benefit those genuinely in need and cut subsidies, including in education, for the “ultra-rich”.
Separately, Yeah proposed a comprehensive review of the country’s poverty line as part of the nation’s efforts in eradicating poverty.
According to the 2022 Household Income Survey, the median monthly household income is RM6,338 with the relative poverty line usually defined as 50% of the median income (RM3,169).
Yeah, who is part of the Prime Minister’s policy advisory committee, said there is a no-one-size-fits-all approach to tackling poverty.
He also said any measures must take into account the various challenges faced across the country.
“We also need to redefine the basket of goods and services that are appropriate for the current times.
“Things have changed, with Internet access now an important aspect,” he said during a panel discussion on ways to eradicate poverty held in conjunction with the launch of the National Symposium to End Poverty yesterday.
Universiti Malaya’s Social Wellbeing Research Centre director Emeritus Prof Datuk Dr Norma Mansor proposed that subsidy savings be used to provide universal pensions and child grants.
Prof Norma suggested a pension of RM300 be given to all aged 65 and above so that no one would be left out.
“This way, more deserving recipients will be able to receive a pension,” she said, adding that the pension could be distributed via banks.
To ensure that those in the high-income groups, like the T20, are excluded, she said their pension eligibility could be determined through checks with the Inland Revenue Board or Employees Provident Fund data when these individuals come to collect their pension from bank counters.
On the child grant, she proposed a sum of RM150 per child.
She also proposed introducing a maternity grant for mothers who are in their second trimester, if there are sufficient subsidy savings.
