SEBERANG PERAI - Prime Minister Datuk Seri Anwar Ibrahim has clarified the rationale behind subsidy cuts for Malaysia’s wealthiest, the top 15 percent income earners (T15), in the recent Budget 2025. The savings from this subsidy rationalisation will enable the government to channel more funds toward 85 percent of the population, prioritising those within the B40 and M40 income groups, he explained.
During his speech at the National Hawkers and Small Traders Carnival 2024 (HPPK) here, Anwar underscored that the subsidy adjustments are structured to protect lower- and middle-income Malaysians while impacting only a small segment of society.
“Eighty-five percent of the population will not be affected by the subsidy rationalisation,” Anwar reassured the public, emphasising that the changes aim for a fairer allocation of government resources. He further highlighted how the Opposition has been critical of the subsidy cuts for the T15, seemingly defending the wealthy rather than those who genuinely need assistance.
“In Parliament, the Opposition is busy defending the rich, defending the upper echelons of society, when our focus should be on supporting the low-income groups, small traders, fishermen, and farmers,” he said. Anwar expressed frustration that the Opposition appears to be misrepresenting the subsidy rationalisation as unfair, especially in social media discussions. “How can it be unfair?” he questioned. “Those earning RM100,000 or RM300,000 per month receive subsidies too, so how is it unjust to reduce subsidies for this group?”
Anwar clarified that the government’s approach does not involve raising taxes but instead focuses on refining subsidy distribution to target those in need more accurately. He likened subsidies to “handouts” meant for the lower- and middle-income sectors, not the ultra-wealthy. “If you have seven air conditioners at home, you will pay higher electricity bills based on market rates not because of increased taxes,” he explained, illustrating that the policy targets excessive utility consumption rather than middle-class needs.
He pointed out that it is inappropriate for individuals earning hundreds of thousands, or even millions, per month to benefit from subsidies originally intended to assist lower-income groups. “Handouts should benefit those who truly need them,” Anwar insisted, stressing that public resources must be allocated responsibly.
The prime minister also shared that the subsidy rationalisation plan will be further refined, taking into account various factors beyond household income alone. Other considerations, such as household spending and the number of dependents, will be incorporated to ensure the plan does not unduly burden any group. “We want to make sure this subsidy rationalisation is targeted, affecting only the ultra-wealthy without impacting others,” he stated.
The adjustment reflects Anwar’s administration’s goal of promoting greater economic equity and reducing unnecessary spending by redirecting subsidies from those who can afford to pay market rates. This approach, he noted, ensures that essential resources can reach smaller traders, low-income earners, and rural communities, who may be more vulnerable to rising living costs.
Anwar’s clarification aims to quell concerns over the subsidy cuts by reinforcing that the changes are part of a broader effort to support those who need it most. His remarks also emphasize a commitment to achieving a fairer economic environment, reducing subsidy burdens on public funds, and prioritising economic welfare for a larger portion of the population.
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