KUCHING: The Central Database Hub (PADU) plays a crucial role as the foundational infrastructure for efficient targeted subsidy allocation.
Dr Dzul Hadzwan Husaini, a senior lecturer at Universiti Malaysia Sarawak’s Faculty of Economics and Business said by centralising information and streamlining the allocation process, PADU ensures that subsidies are channeled to those most in need, thereby maximising their impact on socioeconomic welfare.
“Government expenditure, notably on subsidies, constitutes a substantial portion of the operating budget, trailing only behind other essential expenses.
“Despite a steady incline in national income over the years, it has remained relatively stagnant within the past decade. This has led to budget deficits where expenditures consistently outpace income,” he told New Sarawak Tribune.
Dr Dzul pointed out that while subsidies are intended to provide essential support, they often suffer from inefficiencies due to indiscriminate distribution.
He noted that 60 per cent of subsidy recipients fall outside the targeted demographic, resulting in wasteful allocation and fostering a culture of moral hazard among beneficiaries.
“This blanket approach not only undermines the efficacy of subsidies but also hampers their contribution to economic productivity.
“Thus, reforming the subsidy system to transition from blanket to targeted distribution emerges as a pivotal step towards fiscal rectitude,” he added.
Meanwhile, noting the public’s reluctance to embrace PADU, he said it likely stems from apprehensions regarding income disclosure and privacy concerns.
He said it is paramount for the government to recognise that PADU is still in its early stages, and it differs significantly from established systems like income tax.
Despite the tepid response, he said this should not deter its implementation.
He expressed confidence that over time, as the benefits of targeted subsidies become apparent and the public get used to PADU, apprehensions are likely to dissipate, leading to widespread acceptance and utilisation of this vital tool for fiscal management.
