KUALA LUMPUR: INDIVIDUAL’S income, rather than household income, will be the basis to determine entitlement under the fuel subsidy rationalisation scheme, which will be introduced next year.
Second Finance Minister Datuk Seri Ahmad Husni Mohamad Hanadzlah said yesterday that those earning more than RM10,000 a month would have to pay the market price for fuel next year, while those earning below RM5,000 a month would get the full subsidy.
Those earning between RM5,000 and RM10,000 a month will get partial subsidy.
Although scant on details, Husni’s statement sparked heated debate, with hundreds of netizens on NST Online’s Facebook page expressing concern about possible loopholes, like the “poor reselling the petrol to the rich” under the so-called three-tier system announced by the minister.
“What happens if the rich car owner (earning more than RM10K) asks his driver (earning less than RM5K) to pump petrol?” asked Lee Teck Chuan, in his posting on this newspaper’s Facebook page.
“Food stall uncles sure earn more than 5k, meaning they are rich?” said another poster, Wai Ken Wang.
Another, Roszali Ramlee, voiced the possibility that those who did not declare their earnings would enjoy the subsidy.
Husni, who was speaking after launching Bank Kerjasama Rakyat Malaysia Bhd’s international Islamic banking conference here, did not give away much, except to say: “The government is in the process of full implementation of the programme and the full concept is on the way and will be handled by the Domestic Trade, Cooperatives and Consumerism Ministry.
“The subsidy will not be based on household income (such as Bantuan Rakyat 1Malaysia) but on the individual’s income.”
He did not elaborate on the mechanism that would be used to vet an individual’s income eligibility, whether it would be by MyKad or through the issuance of a new card.
“But for a rich man with a driver, we will also look at the car registration details and see who it is registered to.
For individuals, such as those working in night markets, there will be a body to verify their income, such as by looking at whether they have a housing loan.”
The government is in the midst of reducing its rising subsidy bill, which it thinks is unsustainable.
“In 2002, the fuel subsidy was at RM1.6 billion a year. Now, it is RM2 billion a month or RM24 billion a year. Is that sustainable?,” said a government source.
“In 2002, there were not that many cars, but today, the sheer volume of vehicles on the roads has increased by leaps and bounds.
“On top of that, there’s the issue of subsidised fuel being smuggled abroad. Does it make sense that diesel sold in Rantau Panjang (near the border with Thailand) costs four times more than in Kota Baru?
“And what about the foreigners in the country who are enjoying the subsidy? The present broad subsidy, which covers everyone, is regressive. In fact, a recent World Bank study showed that the top 20 per cent earners benefit six times more in terms of petrol subsidies than the bottom 20 per cent earners,” said the government source.
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid agreed, saying an effective mechanism should be introduced to ensure the right income group benefited the most from the subsidy scheme.
“The present subsidy system benefits the higher income group more. This should not be the case.
With this new subsidy system, the government can cap its spending on subsidies while, at the same time, deliver it to the targeted income group,” he told the New Straits Times.