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Providing handouts, such as the Bantuan Sara Hidup (BSH), will only increase the government’s debt as it requires Putrajaya to take up more loans to fund the programme. - NSTP/HAZREEN MOHAMAD

KUALA LUMPUR: Providing handouts, such as the Bantuan Sara Hidup (BSH), will only increase the government’s debt as it requires Putrajaya to take up more loans to fund the programme.

Professor Dr Mohd Nazari Ismail of Universiti Malaya’s Faculty of Business and Accountancy said while the government’s initiative in helping the poor should be lauded, this would not fix the cost of living problem.

“If the government borrows more money, the interest payments will increase.

“The amount is already too high at around RM30 billion a year, much more than the total amount of the Sales and Services Tax (SST).

“It’s high time society helped each other rather than through the government or else, the government’s burden will increase,” he told the New Straits Times.

When tabling the 2020 Budget yesterday, Finance Minister Lim Guan Eng announced RM5 billion in allocations for the BSH programme.

He said, on top of last year’s recipients, which benefited 3.9 million households, this year, the government had decided to include 1.1 million single individuals, aged above 40, who were earning less than RM2,000 per month.

All disabled persons, aged 18 and above, with an income of less than RM2,000 per month will receive RM300, and qualify for the free MySalam Takaful scheme.

Federation of Malaysian Consumers Associations (Fomca) chief executive officer Datuk Dr Paul Selvaraj said the BSH programme did not help the people much as it was a one-off payment.

“The people have bills to pay every month, not just once a year.

“We need an integrated approach and I think we should move towards the social safety net system.”

He said programmes to protect low-income earners should be introduced as they would help them stand on their feet.

He said continuing with such a programme would only lead to an increase in the poverty rate, school dropout problem and unemployment.

Datuk Dr Paul Selvaraj

“Firstly, we should look at how to improve the quality of life of those who are older and vulnerable.

“Secondly, improving our children’s education will increase their employability and, thus, bring them out of poverty.”

The 1Malaysia People’s Aid (BR1M) programme, which was introduced during the Barisan Nasional administration, was replaced by the BSH programme aimed at easing the burden of the bottom 40 (B40) households.

BR1M was introduced in 2012, providing a payment of RM500 to households earning less than RM3,000 per month.

On the government’s decision against reintroducing the Goods and Services Tax (GST), Selvaraj said: “After the introduction of SST, prices of goods did not go down. This shows that there are other factors impacting the prices.

“One of them is of us being dependent on imported goods, especially food, which means the exchange rate being an important factor here.

“So what’s important is for the government to provide good services to the people in terms of healthcare, education and public transport.”

When tabling the 2020 Budget yesterday, Finance Minister Lim Guan Eng announced that the government would not reintroduce GST as per the government’s election promise to the people.

Lim said the government’s decision to abolish GST in June last year and replace it with SST in Sept last year saw the country’s inflation rate reduced to its lowest levels since 2007.

“The government has been successful in taming inflation, with 0.2 per cent recorded in the first half of this year compared with 1.0 per cent and 3.7 per cent for the whole of 2018 and 2017, respectively.

“Clearly, GST had contributed significantly to higher prices.”

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