FEB 8 — Is Malaysia a welfare state? Some BN leaders claimed earlier that Malaysia was a welfare state to counter PAS’ welfare state concept. However, Prime Minister Datuk Seri Najib Razak said that Malaysia was not a welfare state.
“The Government adopts a policy that provides a social safety net although we are not a welfare state,” Najib said at the FGS Dong Zen temple in conjunction with the Chap Goh Mei festival.
He also pointed out that many welfare states in the world eventually faced serious economic problems.
The prime minister is right. The economic crisis in Europe has proven the infeasibility of the welfare state system.
People in a welfare state would lose drive to work and unemployment benefits would lead to a high unemployment rate. A welfare state government would also become less efficient with phenomena like bureaucracy and a waste of resources.
Western developed countries are also facing the problem of aging society and the challenge of immigration. Aging population means that the government would have to support more and more people while the high welfare benefits have attracted many immigrants. These shortcomings have resulted in reduced government revenues and increased debts. The society would then lack social resilience and creativity, and eventually hit by an economic crisis.
Malaysia is indeed not a welfare state, since it does not systematically provide all kinds of benefits, including pensions and unemployment dole. However, we have many clearly stated and not clearly stated allowances and assistance, which have consumed many national resources.
For example, the government provides subsidies for various daily necessities, including fuel, liquefied natural gas, rice, sugar, flour and cooking oil. The total subsidy provided by the government in 2009 was as high as RM7.4 billion.
In addition, the government also provides medical, social welfare, education and scholarship aid, as well as assistance in specific sectors, including national cars, fishing, agriculture and small and medium enterprises (SMEs).
Civil servants also enjoy lifelong benefits. Taxpayers must take care of the whole life of 1.4 million civil servants while various allowances enjoyed by civil servants are tax-free. Widows and widowers will continue receiving the pensions after their deaths. A total of RM65.5 billion has been distributed to 600,000 retired civil servants over the past 10 years as wang ehsan and pensions.
Although the government does not provide unemployment dole, it still organises training courses from time to time for unemployed university graduates and each participating students receives at least RM1,000 of allowance from government-linked companies.
The government also guarantees loans of some projects. For example, after allocating RM3.6 billion of loan for the Port Klang Free Zone (PKFZ) project, the government had to allocate another RM4.6 billion, at least, as the project was facing some problems. Meanwhile, the government also saved some privatised programmes, including Malaysia Airlines (MAS), Indah Water and the Light Rapid Transit (LRT).
Since the next general election is approaching, the government has also distributed a variety of assistance, including the RM100 student allowance, RM200 book vouchers, RM500 BR1M aid, as well as a special funding scheme for those who are keen on the National Economic Action Council’s People Housing Programme and the Kuala Lumpur City Hall’s public housing.
Another intangible welfare in Malaysia is holidays. The public domain adopts the five-day work system while the number of public holidays is increasing.
Since the government is so “kind” to not only provide subsidies but also play the “fireman” role, the country is in fact very close to a welfare state, even if it is not. The consequences are imaginable if it really becomes a welfare state. — mysinchew.com
* This is the personal opinion of the writer or publication. The Malaysian Insider does not endorse the view unless specified.
