Targeted subsidies must take into account the realities of people's lives

KUCHING, Sept. 25: The implementation of targeted subsidies must take into account the realities of people's lives including consumption patterns, housing location and daily travel distances to ensure that those who really need it are not excluded from receiving assistance.

Economic analyst, Dr. Dzul Hadzwan Husaini said accuracy of information on income, consumption patterns and people's needs was a major challenge in ensuring targeted subsidy implementation achieves its goals.

"The realm needs such accurate information. If the government doesn't have the right information, it will be difficult to implement and there must be some people who are trapped", he told TVS, here on Thursday.

According to him, income category alone is not sufficient to determine a person's level of need for subsidies because people in the same income group have different spending patterns and commitments.

He said the factors of residence, employment and distance to work should be taken into consideration, especially in determining eligibility and limitations for petrol subsidies.

He cited examples of low-income people who have to travel far every day to meet the demands of jobs and families.

"Even though he said the B40 but demanded their way for every day, they were to go to work remotely. Husbands and wives are far away and sometimes not enough", she says.

Dzul Hadzwan said that the situation suggests that setting a uniform limit on the use of subsidies should take into account the realities of the recipient's life.

According to him, the government should also clarify the mechanism of granting subsidies based on financial background and level of needs of each group.

He suggested that the subsidy mechanism should have several levels of use thresholds to allow aid rates to be adjusted according to recipients' capabilities.

He said that the B40 group may need more support space, while the M40 and T20 may have more room to stand on.

"For example, if we give the M40 a little bit, if we compare it to the B40, maybe that's broader. The M40 may have some room for them to stand", he said.

He said that such an approach however requires a robust data system so that decisions about eligibility and amount of subsidies can be made more accurately.

According to him, accuracy of information is an essential foundation for ensuring that subsidy targeting efforts are truly effective and do not create new problems for the people. -TVS