There is no dispute that the 61% who answered the Pemandu survey agree that subsidies have to be trimmed down. The question is what is the best mechanism and how best to minimise the impact on our poor people and on our national competitiveness.

I would like to propose an alternative approach which I deem can benefit the targeted poor rakyat rather than selective companies and foreigners.

Let see how this Turkey therapy approach works if the government withdraws all subsidies except for education and healthcare services immediately.

Based on the assumptions from various official sources like the Statistics Department, Pemudah, etc, it can be said that:

• 40% of our households have a monthly income of less than RM2,000

The total projected subsidies to be paid out by the government for the period from 2010 to 2014 will be RM526.45 billion, with RM300.10 billion for education and healthcare services.

Hence, by removing all subsidies except for education and healthcare, a whooping RM226.35 billion can be saved.

Next, is how much of a budget is needed for a RM10,000 cash rebate scheme for households with less than a RM2, 000 monthly income.

There are 2.48 million qualified households, therefore the budget for the cash rebate scheme is RM24.8 billion per year or RM124 billion for next five years.

Net savings for the five-year period is RM102.35 billion, close to the RM103 billion package suggested by Pemandu.

The advantage of the cash rebate scheme is that subsidy goes to the hands of the needy rakyat directly. Besides, there will be no more distorted market prices for essential goods and people will be more prudent and cautious in their spending. Also, there will be no more smuggling of subsidised goods to foreign countries.

The low-income rakyat should be able to cushion the one-time shocking inflation hike with hard cash in their hands to spend.