IT is understandable that the Anwar Ibrahim government feels compelled to appeal to the people, especially in the run-up to the state elections, but policy decisions must still be based on pragmatism and current-day realities.

The “Kalimah Allah” issue is a good example of a balanced decision.

In balancing pragmatism against a need to pander to the right wing, the government has been largely able to contain Bornean concerns while being considerate of Muslim sensitivities.

However, the need to be seen as being “tough” on the rich seems a bit contrary to the “business-friendly” environement the government hopes to build to attract investors.

The removal of targeted subsidies seems too quick to target a niche group – the top 20% income earners, or the T20.  

While this could provide some schadenfreude for those resentful of the ruch, it does very little to address the income gap between the T20 and the bottom 40% income group.  

The problem isn’t that the “rich” is “benefitting” unfairly from government subsidies, it is that these subsidies, in their current form, aren’t reaching their target audience. 

We heavily subsidise the production of some crops, much more than our neighbouring countries, yet crops like rice, yield lower production and higher costs, compared to our neighbours.

Our fuel subsidies are misused and still unjustifiably benefit logistics providers who charge premium prices while driving our food prices up.

We pay a higher subsidy to our fishermen yet the prices of fish in Malaysia are generally more expensive than in Indonesia.  

We face similar problems in the production of everything from vegetables to cocoa. 

Middlemen and abuse of the system have been identified as the causes, but despite “best efforts”, not much progress has been made to plug the leakages. 

By focusing on the much smaller part of the problem – the T20 – the government is again failing to address the real issues.

First, the T20, unlike the B40, is a very broad group ranging from your average senior professional or SME owner to your top 10 billionaires. Their income can range from RM10,971 a month to several million ringgit a month. Those at the lower end of the scale take home around RM8,000 a month, which is not much more than someone in the M40 category. 

The T20 generally comprises two groups – the professionals and technocrats who possess highly sought after technical or managerial skills and the business owners.  

Penalising the first would only give them more reasons to leave to ply their trade in other countries, while the second group already have a bags of tricks to avoid paying taxes in the first place.  

This removal of incentives and more punitive taxes would only serve to add to our brain drain while failing to remove the root cause of the leakages

Subsidy leakages, poverty and food production are inter-related issues that most affect the B40 group and must be addressed as such.

Knee-jerk reactions, while winning a few cheers, could cost us dearly in the long term.  

An added economic strain on one end should produce an economic gain on the other end. Otherwise it would have little real impact, not even a political one. – May 24, 2023.

* Emmanuel Joseph firmly believes that Klang is the best place on Earth, and that motivated people can do far more good than any leader with motive.