I refer to the proposed multi-tiered fuel subsidy scheme based on different income levels to be implemented by mid-next year. Seriously, I have never seen a rationalisation scheme more irrational and foolish than this. Are the Treasury and those entrusted with financial management going bonkers? What are they thinking really?

Presently we have fuel subsidies earmarked for different sectors, groups and industries which are not individual-based. But even with this system, the incidence of arbitrage, corruption, smuggling and administrative cost is getting endemic and colossal.  

Just look at the number of personnel involved in administering and enforcing the schemes. Just look at the leakages and the abuse of subsidies. The government has constantly reminded us of the huge allocation for fuel subsidy under the present schemes.

But the more pertinent issue is how many percent of the allocation has actually reached the intended target groups? What is the point if half of this is squandered or siphoned away? Have we not read enough of fuel smuggling happening off Malaysian shores?

If the current subsidy schemes have given us so many problems, can we envisage what is likely to happen if fuel subsidy based on different income levels is extended to individuals living in one principal customs area? Can we imagine the colossal amount of administrative cost and enforcement work that are likely to incur? Can we foresee the arbitrage that is likely to take place? Can we anticipate the livelihood of corruption and abuse of power that are likely to ensue?

We define income levels of less than RM5,000, between RM5000 and RM10,000, and more than RM10,000 as if we are all robots. How do we prove it and how do the authorities confirm it? For sure, not everyone has a salary slip like a government servant. Besides, the salary slips may not prove anything. There are many with lots of wealth but with no monthly income.

On the other hand, there are many with very high income but with no salary slips and no bank account in their names.

For sure, the MyKads of lower-income earners would become a very valuable asset for ‘leasing’.  There are millions of us; how are the authorities going to prevent arbitrage which is most likely to happen especially among family members, relatives and friends. I am sure there are many who are ‘enterprising’ enough to ‘convert’ the scheme into a money-making machine, just like the way fishermen arbitrage the subsidised fuel to make more money than use it to catch fish.   

Maybe the authorities are going to allocate subsidised fuel not just based on income alone but also on the quota eligible, i.e. those with lower income are given a lesser quota to try to prevent arbitrage. After all, they use smaller capacity cars and are not expected to travel more. But does this sound right? More often than not, lower-income earners may have to travel more to earn a living.

Passing it on to others?

Then, what about senior government officers and those high income earners from the private sector? Most of them are given cars with petrol thrown in. So in what ways are the rich and high-income earners made to pay more for their fuel? Can we now see that the poor and the middle income have to shoulder the higher fuel cost out of their own pockets while the rich just pass it on to others?

Penang Chief Minister Lim Guan Eng was optimistic enough to ask the government to pass the savings from fuel subsidy rationalisation back to the people. Frankly, I will be more circumspect with such optimism. The multi-tiered fuel subsidy scheme would result in more leakages, arbitrage, administrative costs and corruption.

Read my lips, arbitrage is a natural human instinct. Most of the people will do it if given the opportunity. Let’s be realistic, we can’t count on the moral fortitude of the people on this. And I am saying all these notwithstanding the three criteria made by (Deputy Finance Minister) Ahmad Maslan that the scheme must be easy to implement, cost-effective, and able to reduce the subsidy shouldered by the government.  

I am saying these are ‘wishful-thinking’ statements that can be written by anyone on one Sunday afternoon. It is not going to happen, so stop the madness.