Rafizi: Govt to share details on subsidy rationalisation mechanism

The Star

Economy Minister Rafizi Ramli said that the government will share details on the subsidy rationalisation plan, including its criteria and implications soon.  On Thursday (April 25), he said that if the government subsidy rationalisation policy is successful, the savings could be diverted into social assistance, potentially boosting poverty reduction while generating fiscal savings.  Read more at https://tinyurl.com/3x692skv  WATCH MORE: https://thestartv.com/c/news SUBSCRIBE: https://cutt.ly/TheStar LIKE: https://fb.com/TheStarOnline

Transcript

00:00 2024 is a year where hopefully we will see more and more execution.

00:07 And as promised, we look at Sudan.

00:09 Just in January, for example, we launched a centralized database, PAPI.

00:14 Despite some detractors, we have registered 11.6 million individuals,

00:21 equivalent to 52.6% of Malaysians aged 18 and above.

00:28 And for the first time in our history,

00:31 we have enough data to understand at the household level

00:35 to be able to do retargeting of subsidy and many other fiscal reforms

00:45 with a fair balance of social costs that it will incur.

00:55 This gives us the sufficient bandwidth to finally implement subsidy retargeting

01:02 and transition away from the regressive model of blank-blank subsidies.

01:07 With this level of necessary granular data,

01:11 we can minimize both exclusion and inclusion errors

01:16 and ensure an equitable distribution of subsidies to those that need them most.

01:22 I know that people have been questioning

01:26 when are we going to announce mechanism, how are we going to do this.

01:31 I think the one difference that I realized when I come to office observing from outside

01:38 is that the days where government operates by decree is over.

01:47 We live in a complicated society.

01:54 I suppose in the 70s, 60s or even 80s then,

01:58 a government minister can give one instruction

02:02 and then the civil service will carry it out and the society will accept.

02:06 It doesn't work like that.

02:08 And therefore, harmonization and preparation for something as big as this

02:13 does take more than a year.

02:16 Government knows exactly what will happen, what is the mechanism.

02:21 It hasn't been communicated because we want to manage the communication.

02:26 Because the last time this was attempted, that was precisely the approach.

02:31 One announcement and the next day you see people queuing at the metro station.

02:36 So in the coming weeks, we will start to communicate the mechanism

02:41 and the criteria for this.

02:44 And explain the implications to this structure of society.

02:49 If we can pull this off, World Bank estimates indicate that the redirection

02:55 of this subsidy savings into social assistance can double poverty reduction

03:01 and still generate fiscal savings.

03:04 [ Silence ]

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