Strengthening Social Protections

Strengthening Social Protections

Strengthening Social Protections

Guaranteed Basic Income Scheme: RM1000 monthly for families who have lost their sources of income due to the Covid-19 MCO.

Since March of 2020, PSM has urged the government to introduce a Guaranteed Basic Income scheme for those who have lost their source of income due to the Covid-19 pandemic. 

PSM’s action plan document titled “Kemelesetan Ekonomi Pasca Covid 19 : Cadangan Memulihkan Negara Demi Rakyat” (Economic Hardship Due to Covid-19: Suggestions for Restoring the Country for the Sake of the Citizens) suggests that every family that has lost their source of income should be paid as much as RM1000 to ensure they aren’t at risk of falling into poverty. This document was submitted to the Prime Minister in July of 2020. 

Unfortunately, however, the government has stuck with a “one-off” model of aid. The Bantuan Khas Covid (BKC) (Covid Special Assistance) Scheme that was introduced is a “one-off” payment whereby individuals living in extreme poverty will be paid RM1300 per household, RM500 per elder citizen, and RM500 for single individuals on an instalment basis. B40 citizens on the other hand will receive a payment of RM800 per household, or RM200 for elderly citizens and single individuals. BKC Aid will also be extended to M40 individuals. Those who have a combined household income of above RM5000 are counted as part of the M40. As much as RM3.1 billion has been allocated for these payments. 

PSM suggests that compared to such “one-off” payments that are broadly distributed from people living in extreme poverty to M40 individuals, it would be more beneficial if the government focused their aid on households that have truly lost their source of income as a result of Covid-19. Aid granted through a Guaranteed Basic Income scheme—that’s modelled after the concept of Universal Basic Income—can help such households handle basic household costs like food. 

In one field research conducted by the Department of Statistics in Malaysia in March 2020, they determined that it is self-employed individuals who have most clearly been affected by a loss of work. As many as 46.6% of self-employed respondents said that they have lost their incomes, as compared to 23.8% of employees, 1.8% of private-sector workers, 0.4% of those working for MNCs, and 0.4% of those working for GLCs. 

This same study reported that as many as 71.4% of respondents who were self-employed only had less than a month’s income worth of savings, compared to 49.2% of employees, 58% of private-sector workers, 31.2% of MNC employees, and 28.9% of GLC workers. As such, immediate monthly aid at this critical time when they’ve lost work is incredibly important.

PSM suggests that this aid  be given to those who have lost work and have no other sources of aid. As such, those who receive other sources of aid will be excluded, such as those who: 

  1. Are receiving SOCSO payments and who can benefit from the Employment Insurance Scheme or other such programs;
  2. Receive fixed pensions (whether from government retirees or other sources) which are greater than RM1000 per month;
  3. Are government staff;
  4. Still have alternative sources of work (after losing their primary jobs);
  5. Still have a source of income that is taxable;
  6. Still work in the public, private/business sector, or other related fields;

This suggestion is specifically for anyone who has lost their source of income; like formal sector workers, small-scale self-employed individuals, and micro-entrepreneurs that have lost their source of work at this time.

Right now, the aid provided by the government like the Wage Subsidy or Social Security Organisation (SOCSO) aid only helps formal sector workers.

Meanwhile, there are around 3 million informal workers and 2 million self-employed individuals who have absolutely no support system when they’ve lost their primary source of income due to the business shutdown in the time of the pandemic.

The estimated necessary cost if this scheme was extended to 700,000 families (10%) at a rate of as much as RM1000, means that we would need RM8.4 billion a year.

The concept for this Guaranteed Basic Income aid scheme comes from the concept of Universal Basic Income (UBI). This isn’t for the purposes of making citizens lazy with a monthly cash payment of RM1000 into their personal accounts. Rather, it’s a social safety net that ensures that households who have suddenly lost their sources of income don’t have to go hungry. A more detailed explanation about the concept of UBI can be found in the following article: (ThinkLeft)

Under the current poverty line of RM2208 per month of household income, roughly 8.3% of households are classified as being in absolute poverty. The threat of Covid and the economic recession directly affects these most vulnerable citizens in the most devastating way. As such, imagine what happens when they’ve lost their primary source of income. Immediate aid of RM10000 towards these households, at the very least, can enable these families to prepare food and other basic necessities until the primary breadwinners for these households can find new work or sources of income.

As such, in the action plan document “Pemulihan Nasional Haluan Baru Untuk Malaysia – Permintaan Rakyat Mudah Je”, PSM has included a resolution that our citizens need the aid of this Guaranteed Basic Income scheme immediately, and not the “one-off” style aid that has clearly failed to heal the socio-economic conditions of affected households effectively.

A. Sivarajan, Secretary General of the Socialist Party of Malaysia (PSM)