Targeted Cash Subsidies Better Than Toll Waiver Says Economist

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The annual savings of RM190 million from scrapping festive season toll subsidies can be channelled to lower-income groups in a targeted approach, the government says. (Bernama pic)PETALING JAYA: Providing targeted cash subsidies to cover toll and fuel expenses would be a more effective solution than continuing the current practice of offering 50% toll waivers across the board during festive seasons, an economist said

Aimi Zulhazmi Rashid of Universiti Kuala Lumpur said the original aim of the festive season toll waivers was to alleviate the financial burden faced by lower-income groups travelling back to their hometowns.
He said although it had initially planned to stop the scheme beginning this year, the government has shown its responsiveness to public feedback by implementing a 50% waiver for Class 1 vehicles.
However, with the country’s economy recovering, Aimi said a more structured and targeted approach to government assistance was necessary.
He proposed that the government align toll and fuel subsidy measures with other government initiatives like the Sumbangan Asas Rahmah (Sara) and the targeted RON95 subsidy programmes, expected to be implemented by mid-year.
“Targeted cash subsidies that cover toll and fuel expenses would be more effective,” he told FMT.
“Assistance can also be provided either for each major festive season or combined with existing aid.
“However, it should be based on net household income. Data from the Inland Revenue Board and eKasih (the government’s hardcore poverty database) can be used (to determine who qualifies).”
Another economist, Abu Sofian Yaacob of Universiti Malaysia Kelantan, suggested that concessionaires be allowed to absorb toll waivers as part of their operating expenses.
The move would reduce their tax burden while lifting the financial burden off the government, he said.
“It’s a win-win situation,” said Abu Sofian.
He added that all savings from the toll waiver could be used by the government to implement programmes beneficial to the public, including providing aid to micro, small and medium enterprises (MSMEs) and gig economy workers.
On Jan 23, works minister Alexander Nanta Linggi said the government was expected to save RM190 million annually by discontinuing toll exemptions during festive seasons in favour of the more targeted approach of channelling subsidies towards lower-income groups.
However, Nanta later announced that the government had decided not to scrap toll waivers altogether. Instead, it agreed to give highway users a 50% discount on toll charges levied in conjunction with Chinese New Year.
The move is expected to cost the government about RM20.08 million in compensation payable to the toll concessionaires. - FMT

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