AUGUST 30 — Bantuan Rakyat Yakin Malaysia (Malaysian People’s Confidence Aid)
Change it to that, if the name reminds this government (Pakatan Harapan) too much of the previous government [Barisan Nasional (BN)].
In case the ghost of BN-past roams the corridors in those massive Putrajaya offices.
A name change won’t upset the people. Stopping it as Prime Minister Mahathir Mohamad intends to, would.
More so, if Pakatan is not careful, the shutdown of the cash handout programme might be what GST was to the fallen BN.
This column won’t piggy back on the global debate about universal basic income (UBI) as much, and how it grows relevant at the cusp of the artificial intelligence (AI) age, as the salaried segments nosedive.
To state the obvious, the machines will mind us, at which point, machine owners profit more as fewer employed humans drain their revenues. Machines don’t have lunch and they don’t holiday in Bora-Bora.
Disappearing jobs won't reappear in new avatars, because the surging automation of artificial intelligence will swallow up tasks. It’s inevitable.
Along with the ancient filing clerks and typists, eventually the absolute numbers of factory floor staff, bank tellers, translators and maybe op-ed writers dissipate, as AI replicates conceptual work beyond the number crunching of first generation computers.
The march of progress does not relent.
Which is why Finland experiments with UBI for a limited number of citizens, and Alaska has been paying people to live in the state.
But as mentioned above, in lieu of short-term thinking sceptics, let’s speak of the Malaysian situation in the “either or” conundrum it exists in.
Meeting points
Up to the eve of May 9, 2018, and long after Malaysians voted and those votes were counted, both factions agree the typical countryman’s wallet was too thin.
The lack of money worry economists, and they’ve duly informed the politicians to “pass the money down” to avoid volatility.
BN introduced the cash handout programme, Bantuan Rakyat 1Malaysia [1Malaysia People’s Aid (BR1M)] in 2012, which grew in quantum and reach. Pakatan agreed to retain BR1M and to top it with subsidies, for petrol and other essentials. They’ve sobered up to the fact — while in government — that they’d have to choose one, not both.
How to best assist Malaysians with cost of living? A direct cash aid, courtesy of the old BR1M with a new name, or a return to subsidies.
Saying BR1M payments attract votes is largely true. Populist measures ratchet up support. But unlike the selective reasoning of the economy minister, Azmin Ali, desperate to align to Mahathir, this column highlights both handouts and subsidies are vote pulling incentives.
In coarser language, they most certainly in most instances are thinly-veiled attempts to procure ballot papers.
Salaries can fix better
The issue of cost of living can be mitigated without handouts or subsidies if median salaries rise commensurately.
This deep dives into debates of government/GLC overstaffing, a durable minimum wage and wage-to-revenue ratios.
Mahathir personally oversaw the wage freeze era to compete as a cheap manufacturing destination in the 1980s and 1990s, which in exchange he offered the people, subsidies.
Today, he seeks to turn back the clock — which recurs in his brief second stint, so far.
Since the wage correction will require time, policy and negotiation, in the medium-term government has the two choices, handouts or subsidies.
But the long-term solution is to up salaries across the lower-earners.
Everyone gets in
Subsidies are lightning rods for abuse.
In the past, petrol subsidies meant cross border smuggling at the Thai checkpoints were rife. Transportation and energy companies utilised it to reduce operational cost, which is not about protecting the disadvantaged.
When there is a subsidy, it just means cheaper oil, equally, for lawyers, container haulers, private power producers and clerical staff. The percentage of the subsidy serving the poor would be low. Who is being protected with the subsidy?
Bring back subsidies today, after the government went through teething problems to wean people off them, would not naturally mean cost of living drops.
Flour, butter and oil prices may fall, but unlikely my local mamak will reduce his roti canai prices. Further, the subsidy is availed by the mamak to up his profit, not to lower his patron’s burden.
Prices only go in one direction, which means government through its policies endeavours to slow down inflation, not reverse it.
Subsidies are abused, but worse, those abuses are near-impossible to curtail. The futility is compounded when the cost of enforcement saddles taxpayers, an additional cost with little payback.
Let the beneficiary decide
Which is why India after seven decades of colossal subsidy failures turns to UBI. They felt before with millions of illiterate and impoverished, an ID system or funnelling through banks universal income was impossible, so the reluctant reliance on a corrupt subsidy structure.
Information Technology now can overcome recognition and banking challenges, so India mulls seriously direct cash handouts.
What’s Malaysia’s shortcomings in directing cash direct to poorer Malaysians, and bypass parasitical elements? The national identity card, especially, stores so much information about us and the integration with other databases — data privacy notwithstanding — renders Malaysia perfect for direct handouts.
Even RM5,000 to poor families annually would afford them the option to offset cost of living. At about RM415 a month per family, it is far less than the subsidies laid out by government per month to that family. But it is left to him to spend for his family’s benefit and not about others getting it cheap using his poverty as an excuse.
It is far easier to tighten controls on the handout database and chase after identity thefts rather than mount a war on subsidy abuse.
Change
This government has to review its decision to dismantle the direct cash handout problem. It is spiting itself in this instance, and abandoning a system inherited because it is pre-loved is reckless.
The subsidy system is bound to fail, and risks being a large commitment to throw good money after bad.
There are complicated decisions to be made by this government, and in many areas harsh action is overdue. BR1M, or a rose by any other name, is not one of them. It’s actually a handy solution.
Selamat Merdeka!
* This is the personal opinion of the columnist.
