By Teh Chi-Chang, CFA
Executive Director
REFSA (Research for Social Advancement)
Friday, 12 October 2012
We write to rebut Dr Lim Teck Ghee’s assertion that “There is little empirical research to back up what has become an increasingly popular line of argument” that blanket subsidies such as for cheap petrol and sugar “benefit upper-class Malaysians who consume much more than their poorer cousins[1]”.
These are the basic facts:
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The federal government subsidy bill is expected to exceed RM42 billion this year.
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If we can agree that subsidies should go only to the poor, and we define the poor as the bottom 1/3rd of households, there will be 2.3 million households or nearly 10 million Malaysians[2] who will get subsidies.
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RM42 billion is enough to give these bottom 1/3rd of households RM1,650 per month – which will more than double their current incomes of RM1,500 per month!