During a recent press conference, Deputy Finance Minister Datuk Chua Tee Yong said that the Government will maintain the 1Malaysia People’s Aid (BR1M) programme despite the upcoming Budget 2016 revision this month.
BR1M was part of the Government’s Economic Transformation Program (ETP) that started in 2012 to assist the low-income earners and reduce effects of the escalating cost of living.
Chua explained that maintaining BR1M is crucial as it acts as direct assistance for those eligible and it helps stimulate the economy. This is because the distribution of BR1M reaches out to those staying in rural areas.
Chua further said that public have been requesting for BR1M to be increased but for now, the Government is only looking into maintaining the programme.
Chua also said the World Bank had agreed that any form of subsidies or financial assistance should be direct in nature. For example, since the rationalisation subsidy on diesel, the demand has reduced by 30%. This shows that the reduction was due to leakages when there was a subsidy on diesel.
Similarly, the Government is keen to continue BR1M as they believe it reduces leakages, acts as a direct assistance to the people and creates a multiplier effect in both urban and rural areas.
In 2015, a total of RM5.35 billion was handed out through BR1M to 7.4 million people in 222 parliamentary constituencies.
Chua also added that since the current economy is volatile, the Government is trying to optimise the country’s expenditure in whichever way possible. They are even looking at postponing development expenditure that does not require immediate launching.
However, they strongly believe that BR1M has to be continued as it contributes to the economy.