Big drop in social assistance programmes

Of great help: Social security institutions, such as Socso and the Employees Provident Fund, have demonstrated great agility and speed in providing relief during the current crisis.

PETALING JAYA: Malaysia has over one hundred social assistance programmes that have increased in number over the past decade, yet the amount spent by the government for such programmes have dropped by about RM20bil between 2012 and 2020.

This was revealed by Khazanah Research Institute (KRI), which said many deserving Malaysians have fallen through the cracks due to the gaps in the national social protection system.

In its latest report on “Building Resilience: Towards Inclusive Social Protection in Malaysia”, KRI called for urgent and gradual reforms to be undertaken.

The research outfit said Malaysia’s most social assistance programmes, such as cash transfers, continue to be short-term buffers, lacking legal and sustainable financial commitments.

This has resulted in unsustainable programmes, of which many are small and fragmented, often with irregular and inadequate benefits.

The report showed that the number of federal social assistance and subsidy programmes have increased to 137 by 2020 from 95 in 2012, not accounting the various new ad-hoc schemes to combat Covid-19 effects.

While such programmes have proliferated, the total spending has dropped from RM45.5bil in 2012 to RM25.5bil in 2020, despite the ever-growing national budget size.

Speaking at the report launch yesterday, KRI chairman Tan Sri Nor Mohamed Yakcop (below) said it is an opportune time for the current social protection model to be reconfigured in preparing for a more volatile and challenging future, due to emerging trends such as rapid population aging and weak labour markets.

Nor Mohamed Yakcop KRI chairman

“These challenges, if not addressed, will limit the nation’s ability to ensure the welfare of Malaysians in the future.

“Social security institutions, such as Socso and the Employees Provident Fund, have demonstrated great agility and speed in providing relief during the current crisis.

“However, the coverage of these schemes, which are contributory in nature, are limited to only employees in formal employment,” he said.

KRI recommends Malaysia to move from the charity-model of poverty targeting to a more inclusive life cycle approach that is forward looking in preventing poverty and addressing vulnerability.

“In this model, policies are designed to provide a social protection floor throughout one’s life span.

“Previous study by KRI showed that social protection policies will matter to at least 70% of households, as they are vulnerable to fall into poverty due to unexpected shocks and many face trade-offs in their consumption,” it said.

In the latest report launched yesterday, KRI highlighted five key policy recommendations to build an improved social protection system. The recommendations are:

> Investing in a universal child benefit scheme;

> Expanding social security to all working-age individuals;

> Establishing social insurance pension for old age;

> Introduction of financing and progressive realisation strategy; and

> Building a national social security institution and a unified registry.