kuala lumpur: According to Economy Minister Rafizi Ramli, the government plans to introduce targeted subsidies in 2024 to free up fiscal space and reduce poverty and inequality at the same time.
“For a country with low revenues and persistent poverty and inequality rates, the blanket subsidies and social assistance model is too regressive. The blanket subsidies model eats into already limited social spending budgets. At the same time, extensive social assistance programs are often received by wealthy households who don’t need them, diluting the value of these programs for the poor,” said the World Bank’s October 2023 Malaysia Economic Monitor. stated in the announcement. (MEM): Today we will “raise the tide and lift all boats”.
According to the MEM, Rafizi said that redirecting expensive subsidy items to expand social assistance at no additional cost could reduce poverty by 2.0 to 5.6 percentage points.
“Direct transfers are estimated to be four times more cost-effective than subsidies in reducing inequality. This is in addition to fiscal savings accumulated for other more efficient uses. ” he added.
The upcoming targeted grant program will be supported by the government’s central database hub (Padu).
“For subsidy retargeting to work, we need to identify households by income, location and commitment, and understand their net disposable income to calculate the subsidy amount,” Rafiji said.
He added that Padu will ensure that the right recipient receives the right amount and avoids problems such as dilution and unfair distribution of benefits.
“Additionally, a central database containing administrative data also opens up opportunities for GovTech, digital identity, and product building as we build forward momentum from this ordering method,” he said.
Regarding the protection and security of personal data, Rafizi told reporters that the government is actively considering measures to strengthen the protection of Padu.
He said Padu includes a comprehensive review of personal data security with the active involvement of the Office of the Commissioner for Personal Data Protection.
Additionally, the government is developing robust cybersecurity regulations and stronger personal data protection standards to encourage investment in the digital sector.
“Because when it comes to data security, it’s not just about Padu… If we want to attract investment in the digital sector, we need new legal reforms and standards on cybersecurity and personal data.
“Thus, everything revolves around operating within regulations and rules for data protection. Padu is a large database and we have strong frameworks, regulations and standards around data protection and cybersecurity. “It is acting as a catalyst for further efforts in the field, which will materialize in due course,” he added.
