‘Don’t tie targeted subsidies to Padu registration’

PETALING JAYA: The government’s noble intention of helping the poor should not be derailed just because some people have not registered under the Central Database Hub (Padu), says Tan Sri Noor Azlan Ghazali.

The director of Universiti Kebangsaan Malaysia’s Malaysian Inclusive Development and Advancement Institute said the two issues should not be conflated.

“It is important for the government to separate the two issues of filling in the Padu system and targeted subsidies. It is not right when many do not receive their eligible subsidies or cash handouts just because they did not fill in their details in Padu.

“This is to ensure that the noble intention of the government to provide assistance to the poor does not go astray,” said Noor Azlan, who pointed out that the government had allocated about 30% of its earnings for subsidies to the needy.

ALSO READ: Here’s how to register for Padu to be eligible for govt aid and subsidies, deadline this Sunday (March 31)

He also said that in handing out cash as assistance for the poor, it is important that it is a “conditional transfer”.

“The government must also look at increasing the recipient’s capacity to boost their future income.

“This means that with the transfer of a cash handout, recipients are also told to register at nearby training institutes or community centres to enable them to get skills training that could help them in raising their income.

“We should not be celebrating the number of recipients who are receiving cash handouts and subsidies. The question is, are there people who have done better in their lives and come out of the cycle of poverty?

“For now, we are informed that there are about eight million recipients who are eligible to receive cash handouts and subsidies. If each has three dependants, that would come up to more than 24 million people,” said Noor Azlan.

Economist Tan Sri Lin See Yan said the government needs to get its formula right on what defines the poor before it implements targeted subsidies.

The former Bank Negara Malaysia deputy governor said that without the right formula, targeted subsidies would be a failure as they would not reach the relevant groups.

Lin was asked if the government’s decision to implement targeted subsidies would be the right way to assist the people.

He said he prefers assistance to be non-cash in nature.

“If it is to help with food, then the subsidies should be tied to food items. If cash handouts are given, these might be used to buy other things and not the items for which they are intended.”

Sunway University professor of economics Dr Yeah Kim Leng said a good formula must be easy to administer so that costs are kept to the minimum, and there are minimal leakages and inclusion and exclusion errors.

“Exclusion errors may lead to the subsidies not reaching the intended recipients.

“A good formula is one that the government can afford and whatever savings that it can derive from the subsidy rationalisation are put to productive uses, such as reducing the fiscal deficit and increasing social and welfare spending for the poor and vulnerable groups,” said Prof Yeah.

On Wednesday, Economy Minister Rafizi Ramli said the low number of registrations on Padu might affect the implementation of targeted subsidies, adding that if the registration exercise did not end on March 31 as scheduled, the government could not move forward on the targeted subsidies plan.