The scheme has been called a stimulus package, economic aid, a welfare payment — and a bribe.
COMMENT
By TK Chua
Bantuan Rakyat 1 Malaysia (BR1M) has attracted lots of attention and controversy lately. The scheme has been called a stimulus package, economic aid, a welfare payment and a bribe. To me, it is probably a little of everything, but nothing definite.
Is BR1M a bribe to Malaysians in general and voters in particular?
To answer this question, we must know whether BR1M has made a significant difference to past elections. I think the impact of BR1M was mixed. Some constituencies were probably more prone to the influence of BR1M than others.
But then, there were probably other factors at work as well. For example, rural constituencies voting for BN could be due to their more “conservative nature” rather than BR1M payment. On the other hand, Kelantan, which is deemed conservative, has voted for the opposition, despite BR1M.
Is BR1M a welfare payment?
Welfare payments are usually for special people – those who are mentally and physically challenged, single parents, those encounter misfortune/hardship and those living below the poverty line. If we have more than seven million Malaysian adults receiving BR1M, what does this tell us?
Is this a handicapped country? Is this a “misfortune” country where most are living below the poverty line, despite more than three decades of unprecedented growth? I think we can’t use welfare payments to solve economic problems that are structural.
Is BR1M economic aid?
A market economy is subjected to the vagaries of boom and bust. There are times when unemployment is high or business is bad.
It is justified to offer assistance when times are bad. But is BR1M trying to do just that? We give BR1M every year regardless of market condition? In good times and bad, we just dish out the money to the people. When we give money to people who do not really need it, the impact will be higher inflation.
Is BR1M as stimulus package?
At least this was the view of Mat Nadzari Ahmad Dahlan, Selangor Umno vice-information chief when he was trying to teach Azmin Ali, the MB of Selangor, some basic economics. But did he?
Stimulus package, as the name implies, is to stimulate the economy in time of economic slowdown. To stimulate, the injection of new funds is required. When the economy is already working at full capacity, further stimulus package will lead to inflation pressure.
Let’s put BR1M to test again. First, BR1M is paid out periodically, not depending on the state of the economy. Therefore it has nothing much to do with stimulus package as claimed.
Second, BR1M is paid from money collected from taxes, particularly GST. There is really no injection of new funds and therefore no stimulus.
What then is BR1M?
To me, it is just a toy politicians play with using other people’s money. If it helps them politically, fine, if not, it is really not their money. Do they really care about people’s welfare? Do they really care about stimulating the economy? I don’t think so. If they do, they should have abolished or reduce GST. That would have been more effective.
TK Chua is an FMT reader.
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