KUALA LUMPUR: There were some challenges in setting the income threshold for the Budi95 eligibility, Prime Minister Datuk Seri Anwar Ibrahim said as he explained the rationale behind giving subsidised fuel to 85% of Malaysians.
“The challenge with implementation arises when we consider T15. If we initially set a target of RM13,000 per month, then increase it to RM20,000 per month, it still places pressure on the upper-middle class,” he said during the Prime Minister Datuk Seri Anwar Ibrahim in the Dewan Rakyat on Tuesday (Nov 4).
“So, we intended to raise it to around RM50,000 per month, but the number of affected individuals is very small. In terms of enforcement, the cost of enforcement is high.
“Therefore, our current view is to implement this first, and if there is a need in the future, when the system is more robust, we can introduce it, but only for truly high-income individuals or genuinely luxury vehicles. That is the issue,” he added.
Anwar also disagreed that the RM2.5bil savings from the fuel subsidies rationalisation was low.
“Some have said that this is lower than was initially targeted based on World Bank studies. I disagree, because we are looking at subsidy rationalisation as a whole.
“From diesel, we saved RM5bil. This was largely because the old system experienced significant smuggling, which was a concern. From electricity, we saved RM6bil, from chicken, floating pricing saved RM1bil; and from eggs, RM1bil.
“In my opinion, this is already sufficient for the government to implement carefully so as not to overburden the people,” he added.
The government is expected to save RM2.5bil to RM4bil from the subsidy rationalisation.
Meanwhile in his supplementary question, Suhaizan Kaiat (PH-Pulai) asked about the projected savings from the fuel subsidies scheme for 2026.
Anwar said the government has targeted a minimum savings of RM2.5bil.
In a related note, he said the government will also consider the needs of the differently able community for fuel subsidies and a specific form will be prepared for them.
