Timely call for social protection reform
To be frank, Prime Minister Tan Sri Muhyiddin Yassin’s call for a single interagency Social Protection Database (PDPS) is very likely to turn into another flawed e-Kasih in the making, “” Social Protection Database vital “” (The star, June 9).
Malaysia already has a national registration system. With some minor tweaks to the Inland Revenue’s approach to tax returns and Bantouan Sara Hidup beneficiaries, we’re not too far away from a fully digital household registration system like the Kartu Keluarga (Indonesia), Tabien Baan (Thailand), Ho Khau (Vietnam) and Hukou (China).
The household registration system is an essential tool not only for population control, taxation or conscription, but its modern application can also lead to serious reforms in social protection targeting, automatic voter registration and energy efficiency subsidies, to name a few.
Its possibilities are also virtually endless as a tool for health policy, education and work, with the added benefit of geolocated information on Big Data.
If done correctly, it can strengthen local government planning, improve public access to essential services and promote decentralization, not to mention the potential savings resulting from costly national censuses and surveys (many redundant).
As an example, the Inland Revenue Board processed nearly seven million tax returns in 2019. Given that definitions of poverty are typically household-based and the labor force is around 15 million people, every working adult should be encouraged to enroll and open an income. tax bill. In this way, people below a certain income level can receive money from the government in the form of negative income tax. But that can only work if we have a proper household registration system.
Over time, family registry data can help policymakers understand issues related to low income or lifelong households, thus enabling appropriate and evidence-based interventions. Our current model of cash transfers, as the WP rightly pointed out, is no longer adequate since handouts are not sustainable as a poverty reduction strategy.
If we take welfare reforms seriously, we must start with the fruits at hand that can make our society a fairer and more just place to live. The two key ingredients that our social protection system lacks are redistribution (reduction of income inequalities, opportunities and access) and risk pooling (risk sharing according to the principle of solidarity).
There is a blatant public misunderstanding of what it takes for Malaysia to achieve a fair and sustainable retirement system for the elderly without having to choose between the ends of a welfare state and laissez-faire capitalism. make.
For example, without a contribution cap, the EPF simply works very hard to enrich people who do not need help when dividend yields are differentiated by compliance with Sharia law instead of socio-economic or demographic considerations. . Setting a cap for those earning more than RM24,000 per month would improve the flow of excess funds to the financial market, including private pension plans.
However, precautions are needed to protect others from real estate speculation (for example, higher stamp duties for high net worth individuals who buy low or medium cost properties). In addition, the EPF technically provides a zero replacement rate as it is disbursed on a lump sum basis.
The government must also meet its pension responsibilities by increasing its contributions to the Pension Fund (KWAP) from the current 5% to 17.5%, as required for statutory bodies, so that the true cost of l The employment of 1.7 million civil servants is correctly reflected. in current federal spending.
If the government is serious about helping families to help their own, the aid disbursement should be based on the household situation and not on individual characteristics. Poverty is fleeting, and it is sheer folly to imagine that at any given moment we would be able to have timely information on all the poor in a national database.
What we can do instead is have a national household registration system that tracks the well-being of our family units over time. This is the digital foundation worthy of the internet age where it shouldn’t be difficult for us to store, access and update our household information through the web.
If the Covid-19 pandemic has taught us anything, it’s that digitization is the future we needed yesterday.
It is important to note that any reform of social protection must go hand in hand with a change in the mentality of the population. There is so much work to be done and so much debate to be had about what kind of incentives we want to put in place. Now is the time for the masses to realize that there are many political tools to make Malaysia a better country, but we don’t have enough serious discussions about the details.
Seri Kembangan, Selangor