Universiti of Malaysia Sarawak honorary professor Madeline Berma was responding to the Organisation for Economic Cooperation and Development (OECD), which said the fragmented cash transfer programmes led to inefficiencies like benefit duplication and overlaps.
Citing various data, the OECD said the Sumbangan Tunai Rahmah (STR), formerly known as Bantuan Sara Hidup, Bantuan Prihatin Rakyat and BR1M, was an example of a government flagship programme that fell short in both benefit adequacy and targeting.
Madeline pointed out that Malaysia still practises a mixed economy where the government is involved in regulating economic activities and needs to manage aid distribution to the people.
“In developed countries, they strongly oppose government intervention in economic affairs. The role of the government is merely to set policies and allow the market to drive economic growth, but Malaysia still follows a mixed economy concept.
“Since the responsibilities and functions of each ministry differ, involving more agencies in aid distribution makes it more effective. If distribution is handled by only one agency or ministry, there is a concern that the aid would reach only a limited number of recipients,” she told FMT.
Responding to the OECD’s criticism that the aid given was inadequate, Madeline said this is unavoidable given the country’s limited financial resources and the need to support vulnerable groups that make up 40% of the population.
“In developed countries, taxes are high, allowing them to provide better facilities and assistance to their citizens, but we are dealing with limited resources.
“There are many people in need. To ensure that as many as possible can be helped, each recipient receives what is considered a reasonable amount. If we complain that the aid is too little, we should ask ourselves whether we are willing to pay high taxes like in other countries,” she said.
The OECD report, published last Tuesday, also recommended that Malaysia limit early withdrawals from EPF and raise the early withdrawal age, as retirees currently face insufficient pension savings.
Barjoyai Bardai from the Malaysian University of Science and Technology said EPF should consider the suggestion, given that the current withdrawal age of 50 is still within the working years for contributors.
“EPF savings should ideally only be withdrawn after retirement because the original purpose of these funds is for retirement savings,” he said.
He also expressed hope that the central database hub (Padu) developed by the economy ministry could be utilised soon to ensure that no groups are left out of social assistance.
“We hope that within the next year, we can fully utilise Padu to conduct a comprehensive assessment and provide subsidies and aid directly to each individual, rather than through different institutions as is currently the case,” he said.
Launched in January, Padu contains household income information of citizens and permanent residents. It is designed to ensure that every eligible individual receives benefits in the form of assistance or protection from various government initiatives.