Money for something… and for a good cause

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Cash aid should be targeted at the truly needy.

Cash aid should be targeted at the truly needy.

By Priscilla Rajan

ANNOUNCED at the last budget, the 1Malaysia People’s Aid – BR1M – began as a one-off cash payment of RM500 to households with a monthly income of less than RM3,000. The plan was to extend BR1M into an annual affair to help lower-income folk manage the rising cost of living.

The scheme targets, in particular, single parents, individuals with dependents, senior citizens as well as existing recipients under the Community Development Department and the e-Kasih programme among others. It is expected to benefit 5.2 million households, representing about 80 per cent of households in the country.

Based on news reports, recipients of the aid say that the money came in handy and was used for things like groceries, schoolbooks and travel expenses, with many also using it to clear household debt.

With strict application, BR1M would bring aid to the truly needy, reducing the nation’s dependence on blanket subsidies that benefit both poor and rich and cost a tidy sum. The Malaysian government is in the midst of a three- to five-year plan to reduce subsidies on fuel, cooking gas and non-essentials like sugar. It costs the government roughly RM456 million a year to control the price of sugar.

Schemes like BR1M and reduced subsidies are meant to work together to lessen the burden of the people in face of the rising cost of living that has permeated almost all aspects of life – from utilities to food and transport. As such, BR1M can’t work by itself, but should be applied in tandem with other projects, such as the Mass Rapid Transport (to improve public transport), the 1Malaysia Housing Programme for first time home buyers with incomes between RM3,000 and RM5,000 and even the Kedai 1Malaysia, which sells necessities at lower prices. Efforts such as these are definite steps forward in helping ease the burden of the people.

However, to reduce the impact of rising prices on livelihoods, it is vital that efforts be made to open further employment opportunities as well as increase the earning power of Malaysians.

As often encouraged by the government, innovation would be one of the biggest driving forces of higher income, especially in an era where technology is king. Malaysians should also be encouraged to open businesses and get into the spirit of entrepreneurship to earn a higher income. The government can support such ventures not just with cash aid, but with training, grants, technology upgrades and trade agreements. Support services like affordable daycare and preschools, after school care, reliable transport and inexpensive housing are just as crucial steps in creating sustainable incomes. Concrete steps like these will encourage a national attitude of hard work and discipline and not an over-reliance on subsidies or on government handout.

In a similar vein, programmes being carried out by Bank Negara’s AKPK where debt management and prudent spending is the key message will encourage Malaysians to look at their spending habits and money management.

Moving families out from below the poverty line, increasing the spending capacity of households, reducing unemployment rates and mitigating increases in the price of necessities are complex and interlinked efforts. While the cash aid of BR1M is an integral part of the puzzle, its full impact can only be realised with other government efforts currently being carried out. It is a step in the right direction in reducing subsidies and, thus, the government budget, but there needs to be a concerted approach to identifying the needs of the people, introducing steps to solve these problems and, at the same time, giving the rakyat options to find sustainable incomes.

 

Photo credit: The Shifted Librarian

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