MALAYSIAN workers and consumers are suffering as incomes are relatively low. 

While Bank Negara Malaysia has suggested that the living wage for a single person is RM 2,600, the World Bank Report in 2018 indicated that 50% of workers earn less than RM 2,160. A prominent economist asserted that 70% of Malaysian households are living with low wages. Many are forced to take two jobs to sustain their families.

The cost of living is increasing. The most basic food items both raw and cooked food are rising at a rate that consumers simply cannot cope with. Many are making harsh adjustments – eating less or buying cheaper foods. Poor households spend up to 40-50% of their incomes on food, thus food price increases impact them severely. Food is becoming unaffordable.

While there are many policy announcements on food security and assuring assessable and affordable food, the price of food continues to rise. While the government continues to proclaim that it will increase food production, our food import bill continues to increase, from RM51 billion in 2017 to RM76 billion in 2022. 

Despite the endless statements on crushing food cartels and monopolies, the government continues to thrive on impacting consumers welfare severely.

There are other factors that continue to negatively impact consumer’s well-being. House prices are unaffordable. The healthcare system is overwhelmed causing those in critical situations to bring their loved ones to private hospitals, ending up with severe financial distress. Patients spent RM 22.6 billion out
of pocket payments for healthcare in 2020. This increased to RM 26.6 billion in 2022.

Certainly the most negatively impacted are the poor and the vulnerable. The role of a responsible government is to ensure that the poor and the vulnerable have access to a minimum quality of life. This is done through an inclusive and effective social protection policy. Two key components of social protection are ensuring basic income security and ensuring universal access to basic needs.

Reliefs should be focused on individuals and families who have fallen below what is considered a socially acceptable standard of living.

According to the Social Wellbeing Research Centre (SWRC), the social protection coverage in Malaysia is narrow meaning that many intended beneficiaries are not protected. For example it states that in 2015, only 9.1% of intended beneficiaries were protected. It summarised that none out of 10 intended beneficiaries are left uncovered, which is too high, even worse than many low income countries.

In the Economic, Monetary and Financial Developments in 2020 Report by Bank Negara Malaysia it was reported that despite the sizeable expenditure of RM 17.1 billion (1.1% of GDP) on social protection programmes, the payout amounts under each programme tended to be small and insufficient to ensure that the most vulnerable households were able to meet minimum income and living standards.

The Federation of Malaysian Consumers Associations (Fomca) calls on the government to reform social protection in Malaysia towards a robust and inclusive framework that can respond effectively to ensure that the most vulnerable members of society are not left behind.

The first priority could be with the establishment of a social protection floor, in other words all individuals should have access to a basic income security as they face major risks throughout their lives. The focus to have access to a basic income would focus on the hard-core poor, the elderly and the vulnerable.

According to the International Labour Organisation (ILO) the national social protection floor should comprise at least the following four social security guarantees:

• access to essential health care, including maternity care;
• basic income security for children, providing access to nutrition, education,
care and any other necessary goods and services;
• basic income security for persons who are unable to earn sufficient income, in particular in cases of sickness, unemployment, maternity and disability;
• basic income security for the elderly.

According to the ILO, the power of the social protection floor lies in its simplicity. The floor is based on the idea that everyone should enjoy at least basic income security sufficient to live with, guaranteed through transfers in cash or in kind, such as pensions for the elderly and persons with disabilities, child benefits, income support benefits and employment guarantees and services for the unemployed and working poor.

It is crucial to ensure that those left behind are brought into the scheme to ensure that they enjoy a minimum quality of life. It is crucial that no one is left behind. – November 1, 2023.

Dr. Paul Selva Raj reads The Malaysian Insight.
 

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.