Budget 2025: Government to prioritise social protection system

THE rising cost of living has seen many households struggling to balance their income due to financial commitments.

Any form of cash assistance would aid in alleviating burden of households expenditure for basic needs and mitigate the impact of price increases.

Between 2000 and 2023, the government provided a significant share of the country’s social resources towards social assistance, totalling RM725bil, or averaging RM30bil annually.

This involves an average 13.5% of the total government expenditure for the period, according to the Economic Outlook 2025 Report.

It said the social protection system consists of three broad thrusts, namely social assistance, social insurance and labour market interventions.

The government will prioritise efforts to enhance the rakyat’s well-being by improving the social protection system, to provide employment with meaningful wages and strengthen policies to facilitate equitable distribution of the nation’s wealth, according to the report.

A study was done to gauge the cash transfer programmes, specifically the Sumbangan Tunai Rahmah (STR) in 2024.

Prior to STR, an earlier study on Bantuan Sara Hidup (BSH) was conducted.

The findings show that the operating costs for BSH were significantly lower than international standards (6%) with only 0.94% of the total allocation being spent on operational expenses in 2020.

However, it highlighted the lack of data integration and interoperability of the system as significant issues.

Despite that, BSH programmes were well-received and played an important role in Malaysia’s poverty eradication strategy without stigmatising the recipients.

The study also found that 36.2% of householders are benefiting from multiple forms of assistance to the STR.

Specifically, 30.7% of households receive social assistance from various federal government agencies followed by religious and charitable organisations (3.8%) and community support programmes (1.7%).

It said 1.7% of hardcore poor households only received STR assistance, and this highlights the need to ensure inclusive coverage so that no eligible individuals are overlooked in the distribution of assistance.

The average savings is very low and many are burdened with financial commitments such as housing rental expenses.

Almost 20% of the respondents to the study revealed that two or more household members received the STR, the report further noted.

The case study highlighted some recommendations which include the need to address the low wage employee with Sijil Pelajaraan Malaysia or lower qualifications.

It said the skill development pathways needed to be enhanced to enable these workers to upgrade their qualifications and improve their earnings potential. The need for a comprehensive review of existing social assistance programmes for social sustainability is also key and is vital to harmonise policies through a centralised regulatory framework that can reduce overlap.

An integral management system that automates and consolidates all data information to reduce inadvertent efforts should be encouraged.

To this end, Pangkalan Data Utama or Padu, has been designed to create a centralised and accurate database to integrate data via the interoperability of existing platforms and that with other agencies.

It said the government should explore alternative funding for social assistance such as waqf, sadaqah and philanthropic funding that could be integrated into the ecosystem.

This alternative funding could encourage the society to participate in social fundraising.