Household net disposable income metrics to be used for accurate distribution of targeted subsidies – Rafizi –

The government is set to adopt a new approach to help refine its planned targeted subsidy scheme, which will begin with diesel and electricity. According to economy minister Rafizi Ramli, the approach will involve collecting household net disposable income metrics from January next year, and these will be used as a structuring measure to ensure that targeted subsidies are more accurately distributed, Bernama reports.

He said the metrics will be integrated with the Pangkalan Data Utama (PADU) socio-economic database that was announced recently by prime minister Datuk Seri Anwar Ibrahim. The PADU database seeks to combine socio-economic information for every household in the country to streamline the implementation of targeted subsidies.

“Once we get to that level (household net disposable income), we will get a clearer picture of the net disposable income comparability for households, and that will allow us to refine any government programmes and target subsidies accordingly,” he said last weekend.

He said this would provide a truer picture than the current approach, which focuses on B40, M40 and T20 income group segments and does not accurately indicate the level of household disposable income from one household to another or take into account other factors such as the number of dependent children and individual location.

Asked by reporters if the targeted subsidy distribution will also cover RON 95 petrol, he said the government will first focus on the electricity and diesel subsidy components that have been announced, and will monitor their effectiveness before announcing any decision on a targeted subsidy for RON 95.

“When we start switching to RON 95, of course the consideration is bigger, involving more people and families from each household. That’s why we will ensure PADU is available by 2024 and any decision on how to target RON 95 can be made easily,” he explained.

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