Is Malaysia a welfare state?

Wan Saiful Wan Jan (The Edge)

SPEAKING at a Chap Goh Meh event in Klang earlier this year, Prime Minister Datuk Seri Najib Razak said that any attempt to turn Malaysia into a welfare state could result in an economic disaster. He was reported to have said that welfare states would eventually lose their competitive advantage due to the onset of complacency.

The prime minister was absolutely right in making that claim and his resoluteness should be applauded. Becoming a welfare state is most certainly not the best way forward for our country.

As we have a shared history with the UK, perhaps it is worth referring to British history when discussing the concept of a welfare state. William Beveridge, in particular, is widely considered to be the architect of the modern British welfare state. An economist and social reformer, Beveridge was asked by the British government in 1941 to draft a report on how the nation should be rebuilt after World War II.

In the Beveridge Report, which was subsequently published in 1942, Beveridge recommended that the government fight against five "Giant Evils" of "want, disease, ignorance, squalor and idleness".

And when Labour's Clement Atlee defeated Winston Churchill in the 1945 general elections, Atlee committed his government to implementing many of the recommendations set out by Beveridge. As a leftist party, it was only expected that Labour would jump at the opportunity to increase the role of the government. That was the beginning of the modern British welfare state.

In implementing Beveridge's recommendations, Atlee's Labour government introduced several new laws.

Through the Family Allowance Act 1945, families with children receive an allowance to help them with childcare, commonly known as child benefit.

The National Insurance (Industrial Injuries) Act 1946 is similar to our social security initiative (Socso). Workers who are injured or disabled in carrying out their jobs receive compensation through this act.

The National Insurance Act 1946 provides more social security to Britons by expanding the provisions of the original Act first introduced in 1911. Through the national insurance scheme, the public pays a regular contribution to the government and in return, they receive a wide range of benefits, including unemployment benefits and a government pension.

The National Health Service Act 1946 created a taxpayer-funded national healthcare system. The Act has has been changed several times since its introduction but the principle of free healthcare remains until today in the UK.

And of course, there have been many more additions to the welfare state schemes in Britain since then.

James Bartholomew, author of the double award-winning book The Welfare State We're In, lists, among other things, free education, government housing schemes, government pension schemes and government-backed social security schemes as elements of today's British welfare state.

It is difficult to summarise Bartholomew's 381-page book in this short article, so I urge readers to grab a copy if they want to know more about the dangers of a welfare state. But to summarise, Bartholomew argues that decades of welfare have created a British society that is poorer than it otherwise would have been, with more unemployment, greater dependency on the government, a higher crime rate, and a less decent and civil society.

So we really should applaud Najib for declaring his new-found stance against the country becoming a welfare state. I say new-found because just a few months before his speech, he was actually supportive of the idea of a welfare state.

In June 2011, Najib was reported to have said that the policies of Umno and Barisan Nasional fit better in the concept of the welfare state because they were the ones that introduced free education, free healthcare, subsidies for food items and subsidies for fuel.

To hear the prime minister changing his mind about having a welfare state after supporting it is definitely good news. Nevertheless, I am worried that the government is flip-flopping again, especially because we are seeing the rise of welfare in Malaysia to a ridiculous extent.

Read more at: http://www.theedgemalaysia.com/highlights/216722-is-malaysia-a-welfare-state.html