Govt to expand fiscal space, shift to targeted subsidies, minister says

The government will continue to expand the country’s fiscal space to improve infrastructure, including schools and clinics, said Finance Minister II, Amir Hamzah Azizan.

He said a current priority is shifting from blanket to targeted subsidies.

For instance, he explained the electricity tariff subsidy introduced in July has benefited the middle-income (M40) group, resulting in a reduction of up to 14 percent in electricity bills.

“About 85 percent of Malaysians are not affected by the electricity subsidy targeting. So by changing the way we deliver subsidies, we can reduce the fiscal burden,” Amir said at the Dewan Negara sitting today.

The minister was responding to a supplementary question from Senator Redzuan Othman on the government’s measures to assist the M40 group amid the rising cost of living.

He also said re-evaluating household income categories in subsidy targeting - by factors such as housing, number of dependents, and monthly fixed expenses - would be more detailed, but complex.

“As such, the Finance Ministry is not ready to implement it for now. The government will continue with alternative subsidy targeting and more focused assistance as an intervention for now,” Amir added.

According to the Statistics Department’s 2022 Household Income and Expenditure Survey, household incomes are classified as follows:

• Bottom 40 percent earners: <RM5,250

• Middle 40 percent income earners: RM5,250-RM11,819

• Top 20 percent income earners: >RM11,819

- Bernama

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