KUALA LUMPUR – A move by the Malaysian government to set up a huge database of citizens’ details to be used for channelling subsidies to lower- and middle-income groups has hit a snag, with only over a third of the country’s 30.4 million citizens registering their profiles by March 31.

The closing date to register with the Central Database Hub (Padu) system is March 31.

The database is a key component of a wider plan by Prime Minister Anwar Ibrahim to reduce government subsidies – estimated at RM64 billion (S$18.3 billion) a year – by starting targeted subsidies and direct cash transfers based on metrics such as household income, family size and monthly expenditure.

The targeted subsidies are expected to start some time in 2024, officials have said. They are part of the 15-month-old government’s promise to improve the lives of poor families, while also reducing the government’s subsidy burden.

But there are concerns that Padu, which stores personal details, including identification card numbers and home addresses, can be hacked. As such, only about 10.6 million citizens have submitted their data despite multiple appeals by Economy Minister Rafizi Ramli, who is spearheading the drive.

There is also widespread wariness about giving the government too much personal information, with Padu asking for income level, financial commitments and expenses, among other things.

The Sarawak state government has even halted the registration process, with Premier Abang Johari Tun Openg saying that Padu should not gather extensive information unrelated to the financial status of the people.

Critics also pointed out that the government could simply collate data already available in government agencies, such as the National Registration Department, the Inland Revenue Board and the Employees Provident Fund.

Meanwhile, high-earning Malaysians are reluctant to register as they believe that they would likely be left out of any government subsidy schemes.

“There are legitimate concerns with data protection and inadequate reasons to register... There is also a sense that public concerns have been dismissed,” political analyst Bridget Welsh told The Straits Times.

“It is a trust deficit,” added the honorary research associate with the University of Nottingham Asia Research Institute-Malaysia.

Mr Rafizi said on March 27 that there are 21 million working adults above the age of 18, and he had hoped to get 10 million of them on the registry by March 31. He said on March 31 that some 10.6 million people have registered. 

The Anwar administration has been struggling to reduce debts incurred by previous administrations, which, as at December 2022, stood at RM1.3 trillion, including the huge annual outlay for subsidies.

Subsidies and social assistance in Malaysia have almost tripled from RM23 billion in 2010 to an estimated RM64 billion today, said a report on March 20 by Hong Leong Investment Bank. Around 82 per cent of the subsidies covers fuel used by vehicles in Malaysia.

Currently, the blanket fuel subsidies at petrol pumps mean that the owner of a luxury vehicle gains more when he fills up his car’s tank than a poor family with a small motorcycle.

An accurate database would allow the government to deliver the discounts directly to lower-income families, while the wealthy would have to pay the full market price for their fuel.

Analysts have estimated that the government may save up to RM29 billion a year if it floats the price of petroleum.

While the government has been talking up the benefits of registering with Padu, not everyone, it seems, has heard of it. Of the 15 citizens from the upper-, middle- and lower-income groups ST spoke to, only five have registered with Padu.

Those who did not register gave a gamut of reasons – from doubts about how secure their data will be to plain ignorance.

Mr Dzulhashmi Zulkhairi, 43, a carpenter from Langkawi, and e-hailing driver Zarif Aiman Zaidi, 24, from Kuala Lumpur, said they were not aware of Padu’s existence.

“What is Padu? I’ve never heard of it. I know that there is government assistance for the poor, but I don’t know anything about Padu,” Mr Dzulhashmi told ST.

Others, such as insurance agent Frederick Lim, 51 from Kelantan, Ms Sophia Halim, 34, and Mr Hakim Ismail, 44, from Kuala Lumpur, found the online registration process to be tedious.

Mr Hakim said that when he wanted to register online back in January, the system rejected photographs of his identification card and instructed him to register in person at one of the government’s Padu counters. “I don’t have time to do that,” he said.

Meanwhile, businessmen Devon Yap, 40 and Shaun Jacobson, 40, told ST they are not eligible for any assistance from the government as they are high-income earners.

Mr Yap said he does not see a reason to register as he will not receive any benefit.

Moreover, Mr Jacobson added, he does not want to receive aid by mistake that should have gone to someone who needs it.

Not everyone is against registering with the database, with those in the lower-income group hoping to receive the promised benefits.

“All of my family and I have registered. We would like the benefits from Padu,” said 60-year-old driver Ramasamy Muniandi.

Ms Husna Zaini, 36, the vice-president of policy at a local bank, registered despite knowing she would not qualify for benefits because of her high income.

“I know how critical it is to have data when coming up with a policy. I don’t want the government to lack data when forming policies. So, I registered,” she said.

Dr Oh Ei Sun, who is a senior fellow from Singapore-based think-tank Singapore Institute of International Affairs, told ST that the lack of government communication to address public concern is the reason behind the lacklustre response to the Padu drive.

“Even I don’t exactly know what Padu is. How are they going to deliver the subsidies or assistance? This has not been clearly communicated,” he said.

Correction note: This story has been updated for accuracy.