What if subsidy is based on the car we drive and not the salary we earn?

What if subsidy is based on the car we drive and not the salary we earn?

I am someone who believes subsidy has to be targeted and it’s not supposed to be for everyone because there are certainly people who do not need them. They want them (certainly) but they do not need them. Sorry, I am not talking about the T15 group yeah. I am speaking about the ‘real’ mahakaya. There are many in Malaysia even if the percentage may not be as high as 15 percent. Maybe can even look at their FB profiles to know some of these mahakaya yeah. Not too hard to spot lah, unless there are some who pretended they are one as well…

There is an interesting question I read in paultan.org

Article in paultan.org Prime minister Datuk Seri Anwar Ibrahim said that the T15 (a new term that means the top 15% earners) and foreigners will soon have to pay market price for petrol, while 85% of the rakyat will continue to enjoy subsidised RON 95. Perhaps there’s no need for a big tech company, mansion or a fleet of supercars to be classified as ‘super rich’ in Malaysia – we’ll soon find out if a RM15k household income is enough to join this rarefied club.

There’s no 100% foolproof way, but professor of economics at UKM-Graduate School of Business Tan Sri Dr Noor Azlan Ghazali opines that there shouldn’t be two-tier pricing at the pumps.

“In my opinion, don’t disturb the price – a fair price, even if it’s high. If there are affected groups, help them in other ways, not by putting two different prices at the pump,” he said, adding that if the government wants to provide subsidy for RON95 to targeted groups, it should be given according to vehicle type and not based on classification of household or individual incomes. Article in paultan.org

What if the people who drives a big car goes to pump petrol using a small car?

Think about this scenario and see if it makes sense.

I (rich person, not me) have 5 cars. 4 luxury ones (any brand you can think of) and 1 old Proton Persona 1.6 liter manual. Since the government says petrol price is based on the car, I will drive my Proton Persona to pump full tank, come back to my home and transfer the petrol to my big car. Since the tank in my big car is bigger, I will need to repeat this step twice so that the big car fuel tank is full and I still have some fuel in my Proton Persona to drive around.

This is just the 1st big car, I will have do the same for all my remaining big cars. WOW… all rich people are so free… to do so? Plus repeat this process every week? Which petrol station would they use? Cannot the same station and I drive there 10 times every week right? Haha.

Could be a better idea, really

Perhaps this suggestion by the professor may work better than trying to do all the high-tech calculations and segmentation to come up with who are these 15 percent people who should not receive the petrol subsidy.

Meanwhile, we do not know who these T15 group is yet. Our Economy Minister Rafizi Ramli saidThe definition of the top 15 (T15) income group as outlined under Budget 2025 will not be based solely on household income. The Economy Minister explained that the government was formulating a more even approach balancing various factors, including locality and government obligations.

The government was still finalising the definition to ensure a fairer distribution of subsidies, he added. Source: thestar.com.my

So, let’s wait for the final definition and the final decision on how best to ensure these subsidies goes to the right group. Noted that the right group cannot be the T15 but the T15 is yet undefined fully currently.

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