Treasury secretary-general says targeted subsidies are a realistic tool to manage living costs, saving RM15.5 billion and keeping inflation under 2%.
PUTRAJAYA: The government views targeted subsidies as a realistic and effective instrument to help households manage the rising cost of living.
Treasury secretary-general Datuk Johan Mahmood Merican said the approach considers the real needs of the people, rather than strictly following economic prescriptions to subsidise only the poor.
He stated that subsidies are not inherently bad but become problematic when applied as blanket measures, leading to significant leakages like fuel smuggling.
ALSO READ: Good governance and targeted subsidies save RM31 billion in public funds
Initiatives such as BUDI Madani and BUDI Madani RON95 tackle these leakages and generate savings, Johan explained in a recent interview.
These savings are then redirected to assist the majority of Malaysians through the Sumbangan Asas Rahmah (SARA) and Sumbangan Tunai Rahmah (STR) programmes.
Prime Minister Datuk Seri Anwar Ibrahim announced in October that the targeted subsidy move had yielded significant results, with total savings reaching RM15.5 billion.
Johan stressed that the SARA and STR disbursements do not create inflationary pressure.
He said the targeted approach has instead helped the government keep inflation below 2%, demonstrating that such programmes do not cause widespread price increases.
“This goes to show that targeted subsidies not only help those in need, but also promote price stability in the market,” he added.
Johan explained that Malaysia’s method differs from some countries that raise prices to market levels and then provide cash assistance.
The Malaysian government adopts a targeted approach specifically to support vulnerable groups. – Bernama
