PEKAN (Pahang) • Malaysian Prime Minister Najib Razak has said the RM6.3 billion (S$2.1 billion) worth of financial aid to be given to seven 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 the 1Malaysia People's Aid programme - known by its Malay acronym BR1M - in his parliamentary constituency of Pekan, in Pahang, on Sunday.
He 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, adding that under the country's petrol subsidy, for example, "people with big cars get more benefits than those who drive a Proton Saga or Myvi", referring to smaller, locally-made cars.
BR1M was first implemented in 2012, when nearly 4.1 million recipients got RM500 each. The cash handout was raised to RM1,000 in 2016 and RM1,200 last year.
This year's payout will be made in three tranches - the first was yesterday while the remaining tranches will be paid in June and August.
FOR PEOPLE'S WELFARE
To say (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.
MALAYSIAN PRIME MINISTER NAJIB RAZAK
1 Malaysia’s BR1M cash handout in 2018 is available to lower-income groups as follows:
• Individuals earning RM2,000 (S$680) and below a month receive RM450, paid this month
• Households earning RM3,001 to RM4,000 a month receive RM900, paid in tranches of RM300 each this month, in June and August
• Households earning RM3,000 and below a month receive RM1,200, paid in tranches of RM400 each this month, in June and August
2 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.
3 In 2017, total BR1M disbursement was RM6.6 billion, more than three times the sum distributed in 2012. This year, the sum is expected to be RM6.3 billion.
4 The number of BR1M recipients has also increased, with 7.2 million last year, up from 4.2 million in 2012. The country’s population is about 32 million people.
5 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 cash aid stand to receive up to RM1,200 each in their bank accounts.
"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 Umno party.
He said BR1M also helped to stimulate the country's economy.
The Prime Minister also hit out at those who, he said, were only good at criticising the scheme, but had no suggestions on a better way to distribute the subsidy.
"To say (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.
Several economic experts told The Star newspaper that the aid programme was welcomed by low-income groups feeling the brunt of rising prices.
"The aid is handy for eligible recipients who need the cash for short-term spending needs," said Mr Lee Heng Guie, executive director of Malaysia's Socio-Economic Research Centre.
Studies show that consumer spending by low-income groups has increased since BR1M was implemented, he said. "Mostly, they use the cash to buy necessities - basic items," he said.
Meanwhile, Dr Jeniri Amir of Universiti Malaysia Sarawak said his surveys show that those living in rural areas were very receptive to the BR1M scheme. He said BR1M was one of the reasons Mr Najib had a high popularity rating of about 60 per cent among Sarawakian voters.
BERNAMA, THE STAR/ ASIA NEWS NETWORK