IT is time for the government to introduce an electronic subsidy card to ensure that subsidisation schemes help only the intended people.
Presently, the subsidies help all – Malaysians and foreigners. This is an inefficient and wasteful method and due to the higher outlay, the government is unable to provide more subsidies to the intended groups.
For example, only about 50% of the people (B40) and about 10% from the M40 group should qualify for subsidies. There is also a need to re-look at the classification of the M40 as it is too general, and incomes within the M40 varies a lot.
Only the lower 10% or 20% of the M40 needs to be included in the subsidy scheme. Presently, the government subsidises all the people – rich and poor – and non-citizens. This is the reason why the government has to spend billions annually for subsidies and still the poor are clamouring for more.
A substantial percentage of it goes to unintended larger groups. This system cannot be sustained as it is presently illogically structured, and the poor do not get enough subsidies during these hard times.
There is no better foolproof system than having an electronic subsidy card very much like the identity card. The BSH methods are a proper and efficient way to confine subsidies only to targeted groups.
The subsidy card can also include the BSH handouts as well as other payments given to the poor. Subsidy card-like schemes can be found all over the world as governments find that this is an efficient way to help the targeted poor rather than through generalised subsidies.
India has a ration card system, which offers a wide variety of products at subsidised prices, and the system generally works well. Even in the US and Western Europe, there are millions of poor and the homeless who benefit from subsidies, and there is nothing embarrassing or shameful about this, as poverty is mostly created by an exploitative socioeconomic system.
Malaysia can introduce a similar system through the application of the subsidy card. The card should contain important personal data as well as the photo of the cardholder. There are supermarkets and retail chains like the 99 Speedmart all over the country and subsidy card holders can get their sundries and provisions at subsidised prices.
Similarly, the subsidy card can also be used at fuel stations for the poor to get their subsidised fuel. Under the subsidy card scheme, more items can be included and subsidised for the target groups such as rice, flour, milk, bread, sugar and others and not only confined to cooking oil as is the case now. A limit should be imposed on the number or amount of the subsidised items – whether it is household items or fuel – the card holder can purchase monthly to ensure that this incentive is not abused.
This will control smuggling in the northern states as well as put a stop to Singaporeans taking advantage of the present subsidy system especially for fuel. Cheating or deception in using the card should be made a criminal offence to prevent forgery or abuse.
The current subsidisation scheme is wasteful as millions of people – the rich, the middle-class, migrant workers, expatriates, tourists and others – benefit from it when they should not.
The minimum wage for workers including low-skilled migrant workers has been increased to RM1,500 and migrant workers, who are mostly single, will not be very much affected by the withdrawal of subsidies.
Many a time there have been proposals for the subsidy scheme to be restructured to make it more focused on targeted groups and also make the scheme cost-efficient in the process but the government has been stone deaf to these suggestions. Maybe the government is unwilling to initiate a subsidy card-like scheme as it is envisioning the country to become a high-income one in the years ahead.
This journey to become a high-income country can continue as there is nothing wrong with it. However, the present reality is that there are millions of people who belong to the lower income group as government plans to eradicate poverty has only shifted poverty from the rural to the urban areas.
Today, urban poverty is prevalent, and the government needs to initiate various measures to overcome it. The new minimum wage is a positive one.
Another will be for housewives to work by way of a system of flexible hours. A lot of industries near low-cost housing schemes and villages can avail of women workers if they opted for flexible hours based on the hours of work daily. This will reduce dependence on migrant workers and help lower income households.
This large group of women are now most unemployed although they would like to work to increase the family’s income. Only a change in some labour laws can bring about this positive move. If a housewife is able to work for four hours in a nearby factory and get about RM50 a day, it would be so helpful for the family.
There is a wide range of jobs that these women can do in the SMEs and commercial entities, which are now being done by foreigners. The Malaysian poor need to be given preference.
Regrettably, our government is more interested in boasting about the number of women judges, women senior civil servants, women board of directors, women MPs and others as a barometer of the progress of women instead of focusing more attention on this large group of semi-literate and SPM-educated housewives who while away their time in the low-cost housing schemes when they could otherwise work and support their families.
With the number of the poor expected to rise due to the socioeconomic effects of the pandemic, it is time to restructure the subsidy scheme to benefit the target groups only and save the government billions of dollars that only enrich the better off further. The poor can be assisted more through a re-structured assistance scheme such as by using a subsidy card. – The Vibes, April 20, 2022
V. Thomas is a reader of The Vibes
