Prime Minister Datuk Seri Anwar Ibrahim's recent announcement on the targeted diesel subsidy has received significant endorsement from economists and the public alike. The initiative, which aims to save the Malaysian government approximately RM4 billion annually, is designed to provide financial relief to the lower and middle-income groups while excluding the wealthier T20 group and foreign nationals.
In his special address, Anwar Ibrahim outlined the specifics of the targeted diesel subsidy, emphasizing its importance in curbing the misuse of subsidies by the affluent and non-citizens. "We raise the impact to the very wealthy and the foreigners," Anwar stated, highlighting the government's commitment to ensuring that subsidies reach those who genuinely need them.
The targeted diesel subsidy will primarily benefit the B40 and M40 groups, which include smallholders, farmers, traders, and fishermen. These groups rely heavily on diesel for their daily operations, and the subsidy aims to alleviate their financial burden. Anwar assured that "bus, taxi operators, and fishermen will continue to be protected through subsidies or assistance that will help them."
The implementation of this subsidy is expected to have a significant positive impact on Malaysia's economy. By redirecting funds previously wasted on subsidies for the wealthy and foreigners, the government can allocate more resources to essential programs. For instance, the Sumbangan Asas Rahmah (SARA) program's allocation has been increased to RM700 million, benefiting 700,000 recipients with added assistance of RM1,200 compared to the previous RM600.
Moreover, the Rahmah Cash Assistance (STR) allocation has been raised by RM2 billion, benefiting nine million recipients, which constitutes roughly 60 percent of Malaysia’s adult population. This increase in financial aid is a direct result of the savings generated from the targeted diesel subsidy.
Economists have praised Anwar's approach, noting that it strikes a balance between fiscal responsibility and social welfare. The targeted subsidy is seen as a strategic move to ensure that government resources are used efficiently and effectively. "The Prime Minister's explanation on targeted diesel subsidies has softened the ground for its implementation," said an economist, reflecting the general sentiment of approval.
The subsidy will not be implemented in Sabah and Sarawak immediately, as diesel is a staple in nearly every family’s vehicle in these states. Anwar explained that postponing the subsidy in these regions is necessary to avoid burdening the local population.
In addition to the diesel subsidy, the government has also increased the Rubber Production Incentive and the Rice Price Subsidy, further supporting the agricultural sector. These measures are part of a broader strategy to enhance the livelihoods of Malaysia's lower and middle-income groups.
Anwar's targeted diesel subsidy is a testament to his administration's commitment to equitable economic policies. By focusing on those who need assistance the most and eliminating unnecessary subsidies for the wealthy and foreigners, the government is taking a significant step towards a more sustainable and inclusive economy.
