Income alone is no longer sufficient to determine eligibility, as households with similar earnings may face very different financial obligations depending on family size, dependents and living conditions.
PETALING JAYA: A voucher-based subsidy model could help Malaysia deliver more effective and targeted assistance, but its success depends heavily on the accuracy of government data, according to Putra Business School economist Assoc Prof Ida Md Yasin.
She said the idea is positive as it allows support to be directed based on actual needs – such as transport or essential consumption – rather than suppressing market prices.
However, she cautioned that the system’s effectiveness hinges on the quality of household data collected.
“Both approaches, whether vouchers or income categories like B40, M40 and T20, ultimately rely on databases capturing income, expenditure, dependents and other household information.
The effectiveness depends on how accurate and comprehensive the data is,” she said.
Ida stated that income alone is no longer sufficient to determine eligibility, as households with similar earnings may face very different financial obligations depending on family size, dependents and living conditions.
She argued that a purpose voucher system could reduce leakage and strengthen fiscal sustainability by improving efficiency in subsidy distribution.
Still, she highlighted gaps in ensuring vulnerable groups are properly captured in government databases.
“Under such a system, the government would provide targeted vouchers to eligible groups, for example RM200 or RM400 worth of fuel assistance per month, instead of subsidising the pump price,” she said.
Consumers, she added, would need to adapt to market-based fuel prices, with assistance provided separately through vouchers.
Public acceptance will be critical, as many Malaysians remain accustomed to blanket subsidies.
The proposal comes as the government refines its income classification framework, including detailed breakdowns of high income groups such as T5, T10, T15 and T20.
Officials are reviewing where appropriate income cut-off lines should be set, as part of broader efforts to align subsidy rationalisation with household needs and fiscal sustainability.
Ida emphasised that while vouchers could make subsidies more equitable, implementation must ensure inclusivity.
“The system must capture vulnerable groups such as the elderly, persons with disabilities, and those in remote areas to avoid exclusion,” she said.
She added that the reform’s success will depend on both robust data management and public trust.
“Targeted vouchers can work, but Malaysians must be convinced that the system is fair, transparent and truly meets household needs,” she added.
