For immediate release
Kuala Lumpur, 21 October 2016 – The Institute for Democracy and Economic Affairs (IDEAS) is encouraged to hear in this evening’s presentation of the Malaysian National Budget 2017 by Prime Minister Dato’ Seri Najib Tun Razak that the government has strengthened its commitment to addressing populations in need through targeted welfare programmes such as the Bantuan Rakyat 1Malaysia (BR1M).
“However, we are astonished that the Government appears to be proud that increasingly more people are depending on and in need of such welfare assistance. Success should be measured not in there being more people being on the programme but fewer and decreasing recipients each year to the point that we no longer need it. We should be concerned that there is a need to increase this allocation each year. BR1M is at risk of becoming a permanent entitlement,” stressed Wan Saiful Wan Jan, IDEAS Chief Executive Officer.
“Najib must be congratulated on moving away from blanket subsidies. When his predecessors introduced such measures, the intentions were noble and appropriate for the time. However, the continuation of such subsidies resulted in long term problems of affordability and sustainability. If Najib wants to leave a positive legacy as a responsible Prime Minister, he must move beyond the reliance on debt to solve problems. The relaxation of debt ceilings for civil servants for example, will only increase household debt.”
“Malaysia’s household debt-to-gross domestic product (GDP) ratio increased to 89.1% in 2015 from 86.8% in the previous year. This makes Malaysia with one of the highest household debts in the region,” emphasised Wan Saiful.
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