Other features can also be explored to reduce fiscal burden — Analysts
KUCHING: Analysts believe that the government should also explore other measures to reduce fiscal burden aside from the possible targeted subsidies.
In a report, the research team at MIDF Amanah Investment Bank Bhd (MIDF Research) said: “We think other additional features can also be explored and added that will limit the eligibility for federal assistance either by time or quantity.”
For example, it explained, individuals who have received government support for the past five consecutive years shall no longer be eligible for future support from the sixth year onward. This may force individuals to improve its situation or look for support from other sources such the non-governmental organisations (NGOs), charity groups or local communities.
“Given the specific timeframe, it may reduce over-reliance on the government,” it said.
Promoting greater roles of NGOs can also help to reduce the government’s fiscal burden, it added.
“Corporations’ allocations for CSR and charity are typically channeled through the NGOs. This can help to address various issues from support for single mothers, individuals with physical disabilities, aged people, and even those with mental illness,” it said.
Aside from that, it highlighted that there should be continued focus to support the rakyat in need.
“Although the subsidy rationalisation is intended to improve the government’s fiscal position, we believe the government will remain cautious in its approach to adjusting the subsidy allocation as well as raising the domestic fuel prices.
“Ultimately, the government will continue to ensure more support is provided to the rakyat who are in need.
“The rationalisation of the subsidy spending is not intended to reduce support for the rakyat but to move away from blanket support which previously were also enjoyed by the high-income groups,” it said.
According to the government’s plan as outlined in Budget 2024, the savings from the implementation of targeted subsidies will allow the government to increase the total allocation for Sumbangan Tunai Rahmah from RM8 billion to RM10 billion.
“This increased allocation translates into a higher maximum rate from RM3,100 to RM3,700. The higher STR allocation will also help to boost consumer spending this year, given the higher propensity to consume among the lowerincome groups,” MIDF Research said.