Policy paper: Rethink Malaysia’s welfare system, BR1M cash hand-outs

Source: The Malay Mail Online

People exchange vouchers for cash Bantuan Rakyat 1Malaysia (BR1M) counter in Kuala Lumpur. — Picture by Saw Siow Feng

KUALA LUMPUR, Feb 28 ― Malaysia needs to review its expensive welfare system and the federal government’s unsustainable Bantuan Rakyat 1Malaysia (BR1M) cash hand-out schemes, according to a policy paper written by three academics.

The 38-page paper titled “Intervention and Non-intervention: Policy Ideas for a Social Market Economy in Malaysia” said the government’s cash transfer scheme under BR1M was both “inadequate and unsustainable” as over 85 per cent of recipients finish spending the cash aid within one month. It cited a news report of Kajidata Research’s February 2017 survey on BR1M recipients’ spending.

“Cash transfers are clearly insufficient, but to many recipients and people who support this system, it is seen as better than nothing,” said the policy paper launched last week by the Academy of Responsible Management written by Universiti Malaya’s Prof Edmund Terence Gomez, Institute for Leadership and Development Studies’ Noor Amin Ahmad, HELP University’s Prof Geoffrey Williams, with support from German political foundation Konrad Adenauer Stiftung.

It said BR1M was designed as a one-off programme but has now become a permanent scheme in Malaysia, noting however that the hand-out may suppress wages and can act as a wage subsidy in many cases. Read more