The government will roll out the targeted RON95 subsidy programme in the second half of 2024 to optimise its resources towards those that need it the most, said Economy Minister Rafizi Ramli in his keynote address at the National Economic Outlook Conference in Kuala Lumpur on Monday (Nov 27).
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NewsTranscript
00:00 In January 2024, I have one month of sleepless nights because we will roll out Paidu, the central database, in January.
00:10 That will give access to granular data necessary for us to implement targeted programs such as subsidy rationalization
00:20 and eventually from the social welfare reforms because we know how fragmented government assistance has been.
00:27 We have 200 plus of so many different social assistance and schemes but when it's fragmented,
00:35 it doesn't necessarily have the impact on day-to-day households and more so when it's fragmented.
00:45 Obviously, there will be a lot of leakages here and there.
00:49 Cyphering issues of duplication enables the government to take a decisive step away from previous administrations.
00:58 That the country where the T20 are receiving 53% of blanket fuel subsidies is not a sustainable model,
01:09 nor is it an equitable one.
01:12 In light of this, our government will roll out a RON95 subsidy retargeting program in 2024.
01:22 I will let you guess when.
01:25 But I've spent the last one year talking about this.
01:29 I know that a lot of analysts out there keep asking why is it taking so long
01:35 because we've seen how it is done in other countries.
01:39 The sequencing is as important, if not more important, than the actual policy itself.
01:48 By sequencing, it means that getting everything ready, getting the buy-in,
01:54 trying to close as many loopholes as possible because we can't afford a U-turn.
02:02 Once we roll it out, it is expected there will be unhappiness here and there.
02:07 There will be teething problems, but we can't afford a U-turn.
02:10 That's why I've been to the point of being accused of being defensive.
02:17 If we had to take one year to prepare the foundation for it, I don't mind.
02:25 So that in 2024, when we do roll out subsidy retargeting program,
02:32 by the end of 2024, it will translate into a much better fiscal position for the country straight away.
02:40 If we are lucky, when this coincides with the upside of the global economic growth,
02:49 the benefit for the country in terms of investments,
02:56 in terms of the outlook and interest in this country will double up by 2024.
03:02 These efforts are in line with the government's central position of widening the fiscal paradigm we work in.
03:09 Given our public finances ran a fiscal deficit of more than 5% for three consecutive years,
03:17 we must find new measures and avenues to mobilize our resources and reduce wastages within the system.
03:25 I can share that our deliberations, first and foremost, is anchored on the sustainability of the policy.
03:36 We've seen so many U-turns before.
03:39 We've seen good policies, when it was implemented rather haphazardly,
03:45 eventually invited so much public backlash, so and so politicians usually turn it around.
03:53 And once we backtrack, it will take a generation before another set of politicians dare to put their neck on the line.
04:02 And that's why I always say when it comes to fiscal tax,
04:07 how exactly are we going to increase our revenue, I'd rather be agnostic.
04:14 If it means that it takes in stages, so long as the final aim of reducing fiscal deficit is on track towards 2025,
04:25 so long as we keep to the debt reduction program,
04:30 that we will start seeing debt reduction for the country from 2026 onwards.
04:37 How we manage it, then I think we have to find the right balance.
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