KUALA LUMPUR: Welcoming Putrajaya's pledge to roll out targeted subsidies in the recently announced 2024 Budget, MCA has voiced its proposal to ensure that the mechanism will truly benefit those in need.
MCA spokesperson, Saw Yee Fung said the government should change the proposed classifying mechanism and utilise the tax reporting system, and not just solely based on "household income" such as the top 20 per cent (T20), middle 40 per cent (M40) and bottom 40 per cent (B40) of the income bracket.
She said that other factors besides income bracket should also be considered, such as residential area and family expenses (e.g., children or parents) to provide a clearer picture in identifying those who require assistance.
"Mr. A, together with his wife, resides in Raub with a household income of RM4,000. According to the existing classification, they fall into the B40 category, which represents household income less than RM4,850.
"Mr. B, along with his wife and three children, resides in Serdang, Selangor, with a household income of RM5,000. However, they are classified as M40 since their income falls between RM4,851 and RM10,970.
"If we only compare based on income, Mr. B's financial situation appears better than Mr. A's. However, after considering factors such as children's education, higher rental costs in urban areas, the cost of living, transportation, and more, Mr. B's usable income is significantly lower than Mr. A's. Therefore, Mr. B is more eligible for targeted subsidy assistance compared to Mr. A," she said in a statement today.
For the second proposal, Saw said the implementation of targeted subsidies should not be distributed in a "one size fits all" manner.
"For instance, Mr. C's salary is RM1,500, and Mr. D's salary is RM2,800. Although both are categorised as B40 and are eligible for the same assistance, it is evident that they require different levels of aid.
"Therefore, distributing assistance in a "one size fits all" manner is not appropriate. It is suggested that the implementation of targeted subsidies be carried out through a "reverse matching" approach.
"Hence, the government is proposing to set an assistance threshold for each category. For example, the targeted subsidy amount for the B40 group is RM3,000. Mr. C with an income of RM1,500 can receive an assistance of RM1,500, while Mr. D with an income of RM2,800 can receive RM200, and so on.
"Through this approach, the distribution of targeted subsidy assistance can be done fairly and efficiently, ensuring that no one is left behind," she added.