PADU, Malaysia’s (or rather Rafizi Ramli’s pet project) ambitious centralised database, has sparked both hope and concern. While its objective of creating a fairer, data-driven system for targeted subsidies is laudable, concerns linger on vital questions about its accuracy and effectiveness by relying solely on individual input.

I can vouch for this as I went through the dilemma of registering for Padu and it’s anything but user-friendly. While Padu’s reliance on technology holds promise for data efficiency, the human factor introduces distinct pain points that threaten its effectiveness:

1. Fear of the unknown: For many, particularly those reliant on government subsidies like fuel aid, disclosing accurate income might trigger anxieties about eligibility. This can lead to underreporting or even fabrication to protect perceived benefits.

2. Taxation: Concerns about data misuse for tax purposes can be a significant deterrent to honest reporting. Transparency regarding data security and robust safeguards are crucial to building trust and encouraging accurate disclosures.

3. B40 access and literacy: The B40 demographic, many of whom lack consistent internet access or digital literacy, might face practical hurdles in accessing and navigating the Padu platform. This digital divide risks excluding a crucial segment of the population from fully benefitting from the system.

4. Rural Communities’ Ketua Isi Rumah in rural areas often struggle with limited internet connectivity and access to technology. Ensuring offline registration options or mobile outreach programs catering to Keta Isi Rumah families is crucial for achieving inclusivity.

A 2018 study by Cox et al., “Survey Versus Tax Data on Income in Developing Countries”, sheds light on this critical issue. Examining 12 developing nations, including Indonesia, the Philippines, and Vietnam, the study painted a worrying picture of widespread underreporting. Across all ASEAN nations studied, the average income ratio between survey data and tax records translated to 30%-43% underreporting. Also, higher-income individuals and those employed in the informal sector consistently underreported their income compared to other groups. 

This trend presents a clear challenge to Padu’s core objective. In Indonesia, for example, the study revealed an average income ratio of 0.63, meaning individuals reported only 63% of their income on surveys compared to tax records. Such discrepancies can significantly skew data, leading to misallocation of resources and potentially excluding those truly in need from receiving crucial benefits.

Initially envisioned as an integrated system pulling from existing databases like KWSP, e-kasih, STR, SSM, and more, Padu’s current form requires individual input for almost every field. With billions of data points across just these few agencies, it is perplexing why Rafizi insists on using the “greenfield” approach that lacks seamless verification, casting doubt on its ability to achieve its core purpose.

Without verified data, Padu risks perpetuating inaccuracies and hindering fair subsidy distribution. Calls for postponing the project until the Personal Data Protection Act is amended highlight concerns about data privacy and potential misuse.

To ensure Padu’s success, addressing these concerns is crucial. Strategies can include: 

1. Simplified data entry: User-friendly interfaces and clear instructions can ease the reporting process for individuals with varying digital literacy levels. 

2. Enhanced data security: Robust safeguards and transparent data management practices can alleviate concerns about privacy and misuse. 

3. Incentives for accuracy: Encouraging honest reporting through rewards or prioritizing applications with verified data can motivate individuals to be truthful. 

Ultimately, Padu’s potential to revolutionise social assistance programs can only be realised if it builds trust with the individuals it seeks to serve. By acknowledging the challenges of self-reported data and implementing proactive solutions, the government must ensure that this ambitious project delivers on its promise of a fairer and more equitable distribution of resources for all. – January 5, 2024. 

* Dr AT Kumararajah 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.