Cash handout for people's welfare, not to buy votes: Malaysian PM Najib

Malaysian Prime Minister Najib Razak being hugged by Harun Abu, 56, one of the recipients of the 1Malaysia People's Aid programme - known by its Malay acronym BR1M - at the launch of this year's scheme in Pekan, Pahang, on Feb 26, 2018.
Malaysian Prime Minister Najib Razak being hugged by Harun Abu, 56, one of the recipients of the 1Malaysia People's Aid programme - known by its Malay acronym BR1M - at the launch of this year's scheme in Pekan, Pahang, on Feb 26, 2018.PHOTO: BERNAMA

PEKAN (BERNAMA) - Malaysia's Prime Minister Najib Razak has said RM6.3 billion (S$2.1 billion)  worth of financial aid to be given to 7 million people nationwide this year is a targeted subsidy scheme hatched by the central bank, not an effort to buy votes ahead of a general election due within months.

Datuk Seri Najib was speaking at the launch of this year's 1Malaysia People's Aid programme - known by its Malay acronym BR1M - in his parliamentary constituency of Pekan, in Pahang on Sunday (Feb 25).

The premier said the aid scheme was proposed by Bank Negara Malaysia in an effort to enable targeted subsidy to be carried out.

"This (targeted) subsidy is better than one-off subsidy which has many leakages," he said, citing instances where subsidised goods were sold for a profit.

"Secondly, the person who should receive the subsidy is getting relatively less compared with others," he said. He said under the country's petrol subsidy for example, "people with big cars get more benefits from those who drive a Proton Saga or Myvi", referring to smaller cars.

BR1M was first implemented in 2012, when nearly 4.1 million recipients received RM500 each. The cash handout was increased to RM1,000 in 2016 and RM1,200 last year.

This year's payout will be made in three tranches - the first was made Monday (Feb 26) while the remaining tranches will be paid in June and August.

  • What to know about BR1M

  • Malaysia’s BR1M cash handout in 2018 is available to lower-income groups as follows:

    - Individuals earning RM2,000 and below a month receive RM450, paid in Feb
    - Households earning RM3,001 to RM4,000 a month receive RM900, paid in tranches of RM300 each in Feb, June and Aug
    - Households earning RM3,000 and below a month receive RM1,200, paid in tranches of RM400 each in Feb, June and Aug

    The amount allocated for BR1M has been rising gradually since the scheme was first introduced in 2012, when RM500 was given to households with a monthly income of RM3,000 and below.

    In 2017, total BR1M disbursement was RM6.6 billion, more than three times the sum distributed in 2012. In 2018, that sum is expected to be RM6.3 billion.

    The number of BR1M recipients has also increased, with 7.2 million recipients in 2017 as compared to 4.2 million recipients in 2012. The country’s population is about 32 million people.

    The average sum received per recipient has also risen to almost double the original amount. It rose from RM500 in 2012 to RM917 in 2017.

    Source: Malaysian government

Recipients from the lower-income groups who qualify for the aid stand to receive up to RM1,200 each in their bank accounts in 2018.

"Our promise (made) five years ago in the Barisan Nasional manifesto, that we will increase BR1M to RM1,200, was fulfilled. We will not make a promise if we think we cannot keep it," Mr Najib said, referring to the ruling coalition led by his party Umno.

Mr Najib said BR1M also helped to stimulate the country's economy.

"Whenever we get BR1M, we use it to buy essential items like rice, sugar, milk and school uniforms. This stimulates the domestic economy," he said.

The prime minister also hit out at those who, he said, were only good at criticising the scheme, but did not give any suggestions on a better way to distribute the subsidy.

He said he was willing to consider any suggestions for implementation for the good of the people and the country.

"To say it (BR1M) is dedak (animal feed or bribe) or 'cash is king' is nonsense. We are a government that is concerned about the people's welfare," he said.