LAST_UPDATEWed, 20 Jun 2018 12pm

Does BR1M Really Help? Let's Hear What Malaysians Think


“I don’t really think BR1M helps to solve the financial problems of the people in the long run. It may bring temporary relief to the people, but definitely not to the country because it is derived through taxes on the people; it’s just like rolling up the money. The Government should find more effective long-term measures.” - Mohd. Irwan Rizal, President of the Customer Relationship Management and Contact Centre Association of Malaysia (CCAM)

“BR1M does help me to ease my financial burden to a certain extent, but I would suggest the Government to make a lump-sum disbursement instead of breaking it into three phases in a year.”- Teh Shieh Ly, a housewife from Bukit Mertajam, Penang

“I must say BR1M is a political candy, nothing more, nothing less. It is used as the ‘tool’ to lure the simple-minded people. The money being dispensed is none other than from the money of the taxpayers, after all.” - Sharmilah Ganesan, a law student from Universiti Malaya (UM)

From the three differing views offered above, it is clear that Malaysians are undecided on BR1M, but no one turns down free money, right?

So far, BR1M has been distributed 4 times, totalling roughly over RM17 billion of taxpayers’ money paid out to date (an estimate based on the amounts dispensed each time). Last year alone, a total of 6.48 million individuals have received the 1Malaysia People’s Aid (BR1M) involving an allocation of RM3.37 billion, according to a Bernama report.

For this year, the amount of BR1M payment has increased from RM650 to RM950 for households with a monthly income of RM3, 000 and below and will be dispensed in January, May and September.

Najib in his pre-Budget 2015 speech last year had announced that BR1M will be continued as part of the government's subsidy rationalization programme by switching to more targeted support for the low-income, adding that “we must do what is right for Malaysia’s economy, not what is popular".

Could the RM17 billion have been better spent? For our former Prime Minister Tun Dr Mahathir Muhammad, the answer is an unequivocal ‘yes’.  If we are to draw up analogies, Tun M in his time as Malaysia’s prime minister had created an entire automobile industry, launched Petronas into a global oil conglomerate and spearheaded Malaysia’s multimedia infrastructure for a lot less than that, even after taking into consideration inflationary adjustments.

Therefore, it is understandable when he wrote in his blog last year that he is opposed to giving monetary handouts, stating that handouts on such a scale is no different from bribery.

What about the general public? What do they think? Like all subsidies Malaysians enjoy, whether it is for petrol, rice or sugar, when offered freely will be taken for granted but there are bound to be withdrawal symptoms when it is suddenly removed.

There is no denying BR1M eases the burden of poorer families

Federation of Malaysian Consumer Association FOMCA Deputy President Mohammad Yusof Abdul RahmanFederation of Malaysian Consumer Association FOMCA Deputy President Mohammad Yusof Abdul RahmanIn an interview with Malaysian Digest, Federation of Malaysian Consumer Associations (FOMCA) Deputy President, Mohammad Yusof Abdul Rahman said the distribution of BR1M has its pros and cons if we view from different perspective.

“BR1M is good for short-term as it provides the deserving members of the society some extra money to purchase necessities, but it does not seem to be the best approach in the long run.

“The only thing that raises my concern is that if the Government continues to distribute monetary handouts to the people, it will increase the people dependence on the Government, thus affecting their mindset and thinking in a negative way,” he said.

Meanwhile, Seputeh UMNO Youth Chief, Razlan Muhammad Rafii said that BR1M is a good approach to help the lower-income households when contacted recently.

“The Government knows the plights and hardships faced by the poor or the lower-income group. BR1M should be seen as a positive financial aid provided by the Government,” he said, without elaborating when asked to comment on Mahathir’s blog posting earlier on BR1M.

Economically, there is also the positive multiplier effect that the handouts trigger in domestic consumption. When overall consumer spending increases, businesses, salaries and corporate tax reflect the positive increase and the government earns the money back in taxation.

But does BR1M do more than just passing the money through a cycle?

There are other ways to assist the needy besides dispensing BR1M

Some quarters have pointed out that BR1M actually brings more negative implications than positive ones as it increases the dependence on the Government and lower the competitiveness in the marketplace.

While the rest are of the view that the monetary handouts are good implementation as it increases the purchasing power of consumers to a certain level, thus increasing consumers’ portion of the national income.

Serdang MP Ong Kian Ming (pic), when contacted by Malaysian Digest recently, said the distribution of BR1M would not help the lower-income groups to cope with their financial constraints, given today’s high cost of living. Serdang MP Ong Kian MingSerdang MP Ong Kian Ming

“With the implementation of Goods and Services Tax (GST) this April, the cost of living of all households would be increased. The BR1M handouts, however, are insufficient to cover the high living costs.

When asked whether BR1M would positively help to solve the financial problems of the needy, he remarked, “The welfare handouts [BR1M] cannot be seen in isolation; it should be viewed together with other government policies like the GST. With the GST coming soon, I am afraid that BR1M does not seem to be a helpful financial aid," he said.

“Firstly, the Government should postpone the implementation of GST, given the fact that currently merely 15% of Malaysians are rich enough to pay taxes. Secondly, we should raise the share of national income because there is only around 32% of GDP goes to wages. Thirdly, the Government should encourage healthy competition among businesses so that we can expect lower prices,” he added.

“BR1M is a painkiller, it brings only temporary relief” – Khalid Samad

PAS Shah Alam MP Khalid Abdul SamadPAS Shah Alam MP Khalid Abdul SamadWhen contacted by Malaysian Digest recently, PAS Shah Alam MP Khalid Abdul Samad (pic) pointed out that the distribution of BR1M does not solve the fundamental economic problems faced by the poor, saying that it would only aggravate the problems if the roots are not being addressed properly.

“BR1M, if you put in medical analogy, is like a painkiller and it brings only temporary relief.

“While I do not deny the fact that BR1M does help to ease the burden of the poor at a certain level, but I must say it is merely designed for political mileage. Its main objective is to ensure a better chance of Barisan Nasional (BN) winning the election. It would not bring positive outcomes in the long run since it is not an effective, workable approach,” he said.

“Instead of giving handouts, it is important for the Government to do a thorough analysis on the actual economic problems by rectifying the loopholes in the economic policies.

“Since there is a lot of money going down the drain due to high levels of corruption in the country, a greater transparency and accountability in managing the national economic is urgently needed,” he said, adding that more emphasis should be focused on research and development, education and skills training.

Are there better ways to assist the lower income group cope with the rising cost of living and more importantly, with better, more permanent results?

What do the general public have to say about BR1M?

Malaysian Digest spoke to politicians, lawyers, government servants, NGO officers, general public and recipients of BR1M to find out what they think about the BR1M handouts.

Following are a selection of the range of views and opinions received in addition to the ones highlighted at the beginning of the article.

“BR1M is basically a positive approach to help the needy, but I am of the view that it should be targeted only to the right or deserving groups..I would personally label this phenomenon as a ‘blanket subsidy’ as they are ‘subsidizing’ the general public instead of only a selected group, and this not a healthy practice in essence.” - Economic expert and lecturer of the Faculty of Economic and Business of Universiti Malaysia Sarawak (UNIMAS), Prof Dr Shazali Abu Mansor

“I don’t think BR1M helps in solving the financial problems of the people; it only makes things get worse because the Government has to ‘dig up’ more money in order to give this [BR1M payments]…Instead of giving these handouts, a more practical and long-term measure is required.” - UMNO Ampang division Youth Vice Chief, Zulkifli bin Rajalie

“BR1M is only a short-term solution to the financial problems confronted by the people.. they should ensure affordable education and healthcare as well as to bring the unemployment rate down to its lowest level. Simply put, BR1M has more negative implications than positive ones.” - Former Bar Council President, Ragunath Kesavan

“BR1M does not really help in terms of solving the financial problems faced by the people since it is only a one-off monetary aid. Instead, the Government needs to come out with long-term measures. For example, they should introduce price rationalization for essential items, increase the disposable income, provide more avenues to generate money and offer coupons to the poor for buying essential items.” - Dr Bisant Kaur, Senior Director of Federation Agricultural and Marketing Authority (FAMA)

“BR1M is a good step forward as it helps to solve the financial constraints of some people, but then again, I think it should be paid only to the deserving people who are really in need or those poverty-stricken families. In order to effectively tackle the financial problems faced by Malaysians, the Government should increase or set a minimum wages to employees both in government or private sectors. This can help them to alleviate the financial burden.” - Former Congress of Unions Employees in the Public and Civil Services (CUEPACS) President, Datuk Omar Osman

So, there are as many pros as there are cons according to Malaysians. One thread runs through the entire conversation though. It is highlighted in almost all the views presented, that BR1M is a ‘short-term solution’, more targeted subsidies to the poverty-stricken are needed, the urgent need for more long-term measures, the underlying notion, that BR1M is not sustainable economically or politically, and cannot last forever.