KUALA LUMPUR, July 27 — Significantly lower revenue for the government due to the Sales and Services Tax (SST) could affect social support programmes for pensioners even as Malaysia turns into an ageing country, a health think tank warned today.

Galen Centre said the austerity measures that the Pakatan Harapan (PH) government was practising would cause a broad reduction in spending and this may result in the elderly population being vulnerable to fewer government programmes or social support infrastructures being supported through public funds.

“By 2030, it is estimated that 15 per cent of the Malaysian population will be classified as senior citizens above the age of 60. Most will have reached retirement age, no longer be working and very likely have stopped paying income tax.

“Already deemed as a country which is ill-prepared to deal with an ageing population, this development puts the ageing population at risk,” Galen chief executive Azrul Mohd Khalib said in a statement.

Azrul added that it was challenging to meet the financial and social service needs of increasing numbers of senior citizens because of longer lifespans, stagnating birth and fertility rates, escalating healthcare costs, a shrinking productive workforce, and an infrastructure which is more favourable to those who are younger and contributing to the economy.

“It represents a demographic crisis in the making. Social security safety nets, welfare systems and pension funds will be significantly stretched and overtaxed. These demands will only grow greater as the years go by.

“We seem to not have a long-term sustainable plan on how we are going to fund them,” said Azrul.

According to Azrul, to avert a potential crisis, there must be development of financing and insurance systems for long-term care better than the ones currently in use.

The government should also harness developments in medicine and healthcare services to keep senior citizens healthy and active as long as possible.

Measures must also be taken to change the organisation of community services to ensure that care is more accessible.

The SST is expected to provide RM21 billion to government coffers compared to the Goods and Services Tax (GST) which had collected RM44 billion.