Anwar defends subsidy restructuring, excludes Malaysia’s affluent from benefits

Prime Minister Anwar Ibrahim recently defended Malaysia’s subsidy restructuring programme, which aims to benefit targeted groups by excluding affluent households. Anwar explained that the policy shift differs from previous administrations’ proposals for a nationwide electricity tariff hike, as the increased tariff will only impact multinational companies and high-income households.

“This does not burden the people as compared to the proposal by the previous administration in wanting to increase the tariff for all, this must be understood,” he said during a press conference after chairing a National Economic Action Council meeting in Putrajaya.

Anwar added that the same principle will be applied to any future restructuring or rationalisation of subsidies introduced by the government, such as the existing fuel subsidy system. “We are not reducing or discontinuing subsidies to the people but subsidies such as electricity and Tabung Haji benefited by the rich are not reasonable to be continued,” he stated.

The Prime Minister questioned why some people still defend subsidies for Malaysia’s wealthy, who reportedly make up around 20% of income earners and are known as the T20 demographic group. He revealed that the Central Database Hub will be used to manage and coordinate the distribution of subsidies to eligible groups.

The upcoming increase in electricity tariffs was initially announced in December 2022, with Anwar stating that it would only affect multinational companies. On May 22, he confirmed that the T20 group would also be excluded from the subsidy scheme to facilitate a more targeted distribution of subsidies.