Welfare State: Mahathir's reasoning is flawed

Barisan Nasional and PAS are locking horns on the issue of a welfare state and who can do it better than the other. It is an endless circle to arguments that would lead no-where because in order to determine which is the better model - the model itself has to be put to the test.

And into the fray jumps former prime minister - Mahathir Mohamad.

According to Mahathir Mohamad, Malaysia was a partial welfare state and he remained steadfast that it should not be allowed to become a full-fledged one as it will bankrupt the nation.

He goes on to expound the fact that the government has spent so much in terms of dollars and cents to keep the living cost low and to provide basic enmities such as schools and hospitals.

Yet, his reasoning is flawed because it only takes into account the idea that a welfare state feeds its citizens with money and that alone would keep them happy.

A welfare state is more than that. It includes providing equal opportunity to all citizens to participate in building a better life for themselves. It also speaks of the citizens responsibility towards one another, the strong helping the weak and the plenty providing the poor. It goes beyond merely providing money.

“I believe that if we have a full welfare state, we’ll go bankrupt,” he said and pointed to Greece, which had announced bankruptcy due to overwhelming debt last year.

Mahathir said the Mediterranean nation became broke because “they spent money giving their people, they don’t have to work, you go and retire at 40 years old, you get pension, you do that, you go bankrupt.”

Worse is yet to come

When Mahathir used Greece as an example, he may have forgotten the fact that it will be a BN government that will lead this country into bankruptcy and not because Malaysia is a welfare state.

Mahathir who coined the phrase, “Melayu mudah lupa,” may actually be living it out himself.

Back in 2009, Abdullah Badawi allowed all civil servants a choice to either remain with EPF or revert to the pension scheme. Many in the civil service opted for the pension scheme and rejoiced in the fact that they can now withdraw their EPF money.

Economically, this was blunder by Abdullah and the BN government. Come retirement time, almost 2 million civil servants would be drawing pension from the government and this would put the strain onto the countries’ already depleted coffers.

In Greece, it was the gross mismanagement by the government that led the country into bankruptcy. The level of competitiveness was low, much-needed reforms were overdue, government bureaucracy was bloated and corrupt, and the country continued to live beyond its means. Even though the national pension funds were chronically short of cash, female public employees with school-age children are allowed to retire at the age of 50.

Educated young people from the middle class had little prospect of finding employment, despite being well qualified, and were forced to take casual jobs to make ends meet. As a result, many young Greeks were forced to live with their parents until they were well past the age of 30.

Greece went bankrupt because it’s government failed to manage their finances and come up with good strategies. Eerily like Malaysia.

Whatever welfare model from BN or PAS or Mahathir is pointless if the government of the day mismanages tax-payers' money. And to date we have gross examples of leakages of public funds with no returns or benefits to the country.

RM1.8 million for website campaigns, RM5 billion for a 100 storey tower, skewed power deals with independent power producers and a host of other grosses, chip away at public funds.

Malaysia will not go bankrupt if it was a welfare state, instead it will go bankrupt because the government of the day have spent too much on useless things.

- Malaysia Chronicle