PUTRAJAYA: The government is working out the income threshold for fuel subsidies to ensure that vulnerable groups do not experience sudden financial shocks, said Economy Minister Akmal Nasrullah Mohd Nasir.
According to Akmal Nasrullah, determining the exact dividing line between those eligible for subsidies and those who will be excluded remains the government’s biggest challenge.
"We do not want to cause a significant shock to groups that still require support, or those who are not fully ready to transition.
"That is the core of our discussions to determine the exact dividing lines between those who rightfully deserve the subsidy and those who should be removed from the system," said Akmal to reporters during a press conference on Monday (May 11).
Akmal Nasrullah said the matter was brought up at the recent National Economic Action Council meeting, with Prime Minister Datuk Seri Anwar Ibrahim expressing the government’s readiness to balance the needs of the people through a targeted approach.
Akmal Nasrullah also said the government is moving away from blanket subsidies and instead focusing on needs and usage to ensure the subsidy truly benefits targeted groups.
"The details are being scrutinised by a crisis management committee," he added.
On when it would be implemented, Akmal Nasrullah said the new targeted subsidy mechanism will likely be rolled out at the beginning of a month.
"In my view, it is best that we finalise this before the start of a new month. Bringing about this change involves system readiness to ensure the screening process runs smoothly.
"Implementation will most likely be guided by the start of the month, but this is still under discussion," he said.
Asked if the Central Database Hub (Padu) will be used to classify income groups, Akmal Nasrullah said the evaluation will be multidimensional.
"Evaluation will be based on income, but we are also considering other aspects. The Economy Ministry is ready to provide the necessary data points and dimensions as a reference.
"Once the policy is decided, we will share the details. Having a clear dividing line will make it easier for the target groups to accept, and we must also provide room for appeals," he added.
Addressing concerns from the T20 group, who are the nation’s largest taxpayers, Akmal Nasrullah acknowledged their contributions but stressed that blanket subsidies are unsustainable.
"The Economy Ministry’s stance is consistent: the provision of this assistance must be targeted. We definitely take their contributions to the country into account.
"However, if the current massive amount of subsidies is not managed carefully, it will have negative implications. We are trying to strike a balance between protecting the people, managing inflation, and ensuring national development.
"By maintaining our economic resilience and ensuring economic activities continue to thrive, the community as a whole will ultimately reap the benefits," he said.
On Sunday (May 10), Anwar said Putrajaya will finalise the rationalisation of fuel subsidies, particularly targeting higher-income earners soon.
Anwar said a paper on the matter, prepared by the Crisis Management Task Force under the National Economic Action Council, was tabled a month ago.
