Thursday, October 7, 2010

Subsidy revisited. How to prepare for subsidy cut?

Malaysian are facing subsidy cut - which is suppose to be a good move for the country. But are we ready? Can we do it right? How it affects our real purchasing power?

Based on these assumptions from various official sources like Statistics Department, Pemudah, etc.,
- 40% household monthly income is less than RM2,000.
- There are estimated 6.2 millions households with 4.5 average headcounts per household.
- Subsidy is treated as debt, growing at 12% per annum from 2010 till 2014.
- 57% subsidy is allocated for education and healthcare services.

Total projected subsidies paid by the government for the period from 2010 to 2014 is 526.45 billion, with RM300.10 billion is for education and healthcare services. Hence, by removing all subsidies except education and healthcare, a whooping RM 226.35 billion can be saved.

Source: http://anilnetto.com/accountability/will-subsidy-cuts-hurt-the-poor/?cid=48678

Best defend strategy - Earn more and spend wisely.