Subsidies, Cash Aid As Temporary Buffers Must Lead To Financial Independence - Experts
By Sakini Mohd Said
KUALA LUMPUR, Oct 28 (Bernama) -- The success of government subsidies and cash assistance should be measured not merely by allocations or the number of recipients, but by their effectiveness as temporary financial buffers while helping recipients raise their incomes and achieve long-term financial independence.
In fact, economist Prof Dr Ahmed Razman Abdul Latiff said the success of government assistance should be measured by improvements in recipients' incomes, employment stability and ability to meet household expenses.
The Putra Business School MBA programme director said financial aid must be supported by relevant skills training, job opportunities and effective microfinancing to gradually reduce dependence on government assistance.
“Higher income alone does not necessarily mean a recipient is financially independent, particularly when basic expenses, family commitments and the ability to cope with financial emergencies are taken into account," he told Bernama.
Ahmed Razman stressed that empowerment programmes must also address barriers such as transport, childcare responsibilities and limited access to employment opportunities.
He added that continuous guidance was necessary to ensure skills acquired through training could be translated into sustainable income.
The approach of balancing immediate assistance with long-term economic empowerment is reflected in Budget 2027, which allocates RM16 billion for Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA), RM200 million for the SEJAHTERA MADANI Grant and RM6.6 billion for microfinancing.
The government has also allocated RM2.62 billion in subsidies and incentives for padi farmers to reduce production costs, boost productivity and strengthen national food security.
Meanwhile, Assoc Prof Dr Mazlan Ali said providing skills or equipment alone would not guarantee financial independence if recipients lacked the resources to meet daily expenses or sustain income-generating activities.
“The philosophy of teaching people to fish rather than giving them fish may sound ideal, but recipients still need financial support and access to markets to make productive use of the assistance provided.
“For example, giving someone a sewing machine is not enough. They also need capital to buy fabric and thread, as well as access to customers.
“Without cash or working capital, the equipment may end up unused or, worse, pawned or sold to buy daily necessities,” he said.
Mazlan stressed that cash aid should act as a short-term financial buffer, while skills development and entrepreneurship initiatives provide pathways towards higher incomes and economic self-reliance.
He cautioned that discussions on subsidies should focus less on the amounts announced and more on whether assistance genuinely helped recipients escape poverty.
He said the success of welfare policies should ultimately be measured by tangible improvements in living standards and social mobility rather than the volume of aid distributed.
-- BERNAMA