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Targeted subsidy mechanism in the works, says PM Ismail

He says efforts are underway to ensure that the allocations set aside for the deserving groups are not arbitrarily enjoyed by irresponsible parties.

3 minute read
Children look over the balcony of a low-cost apartment unit in Sentul, Kuala Lumpur.
Children look over the balcony of a low-cost apartment unit in Sentul, Kuala Lumpur.

A suitable mechanism for the implementation of targeted subsidies is being formulated to ensure that the assistance provided by the government is received by the deserving groups, Prime Minister Ismail Sabri Yaakob said today.

He said various aspects of the mechanism need to be fine-tuned so that the allocations set aside by the government to help the people do not end up being arbitrarily enjoyed by irresponsible parties, including foreigners.

"Yes, the government has suffered a massive loss due to untargeted subsidies as all quarters were enjoying the subsidies which are meant for a more deserving group, which is the poor," he said during question time at the Dewan Rakyat sitting.

He said this in response to Anwar Ibrahim (PH-Port Dickson) who asked about the government’s steps to address the leakage of subsidies which he said are currently being enjoyed by the rich and the foreigners.

The prime minister said the matter had also been raised and studied by previous governments, with nothing implemented so far. 

Ismail said the government was also in the midst of combating smuggling activities involving subsidised items such as cooking oil at the industrial level and at national borders.

He said the authorities would also conduct audits on manufacturers and get detailed information on their buyers.

"The easiest misappropriation (of the subsidies) would be at the repackers level as they are allowed to repack, for example, a tonne of cooking oil, but where is the oil sent and who are the recipients? These are the details we want to get from the factories," he said.

To combat smuggling activities at the borders, he said the government had ordered the involvement of the police and the armed forces, in addition to an enforcement team from the domestic trade and consumers affairs ministry.

"The government doesn’t sit still… we are doing our level best for the country," he said.

Ismail said in order to help Malaysians cope with the rising cost of living, the government had allocated subsidies of over RM77 billion, more than the original allocation of RM31 billion for 2022.

He said this included the subsidies for cooking oil amounting to RM4 billion, wheat (RM40 million), liquefied petroleum gas (RM2.6 billion), diesel (RM7.5 billion) and RON95 petrol (RM27 billion).

"No subsidies have ever been withdrawn. If there were campaigns calling for the government to return the subsidies, they were not true because the subsidies have never been removed since the day they were implemented," he said.

The prime minister said the subsidies given by the government had also caused the country’s inflation rate to hover at 2.8%, the lowest in Southeast Asia.

He said apart from the subsidies, the government had also given cash assistance through the Bantuan Keluarga Malaysia (BKM), with those in the B40 group receiving a maximum of RM2,600 per year.

"We will see how the situation is. If we need to increase it (BKM), we will. If the prices of goods are established, we won’t," he said.

Meanwhile, replying to Mohd Salim Sharif (BN-Jempol) on the difference between the Special Task Force on Jihad Against Inflation and the National Action Council on Cost of Living (NACCOL), Ismail said the task force focuses on the latest and current issues on price hikes while NACCOL, which meets twice a year, discusses policy issues, not only concerning the price of goods, but also the cost of transport and housing issues.

"The special task force chaired by Ketereh MP (Annuar Musa) is required to make announcements or hold a press conference twice a week so that the people know the latest developments and what actions are being taken by the government," he said.