Why is the Padu sign-up so low and how do we fix it?

 

Registrations with the Central Database Hub (Padu) had reached 4.32 million or 14.4% of 30.08 million eligible Malaysians two weeks before the March 31 deadline.

Some behavioural scientists blame low registration on complicated psycho-social phenomena including a political power game where the rich and powerful resist policies that take from them and give to others.

They also blame “present bias” or procrastination where people delay until the last minute. “Cognitive bandwidth” or limited attention spans put people off. “Friction costs” or just too much effort, stop people filling out the tedious forms.

Apparently “time poverty” also stops the poor and disadvantaged from registering, although there was no evidence that this or any of the other theories affected registration for MySejatera during the pandemic.

There are three much more obvious reasons. First, many people have been terrified by claims that their personal data is at risk. Second, the general level of communication, promotion and awareness has been very low. Third, people do not know the direct cash benefits of registering for Padu.

This has raised calls to replace targeted subsidies based on income to targeting based on social characteristics.

The reasoning goes that income is complicated and costly to monitor but social characteristics are easily observable. The simplest lifecycle approach focuses on the young and the old who are sometimes at most risk of poverty.

This prioritises families with children, expectant mothers and the elderly. Those of working-age without children would have to work. If low-income reflects low productivity that can be improved with up-skilling according to this view

Simplicity is a key issue but this is too simple. Targeting children and old-people excludes millions of low-income people who are childless or not elderly. It would include rich people with children and a good pension, so their income would still have to be monitored.

We also know that low-pay is not solved by skills training, if it was we would not have two million people underemployed.

Lifestyle targeting creates a “deserving” and “undeserving” attitude for social protection based on arbitrary, often moral judgements about lifestyle choices.

There is now a consensus that all cash aid should be targeted and while the low registration on Padu is a challenge it does not justify a default to old-style, ad-hoc targeting based on arbitrary lifestyle criteria.

In the short-term it would make sense to require registration on Padu for small one-off payments available to everyone.

Examples include the RM150 Bantuan Awal Persekolahan (BAP) or the RM100 e-wallet launched last year. This would push up registrations on Padu and show M40 and even T20 groups that they will benefit from registering.

Once registrations have improved the government can target all schemes based on income and need. They can raise the value of the cash transfers by redistributing from the rich to the poor.

There are limited long-term effects of universal schemes like BAP or e–wallets on intergenerational income mobility and socioeconomic outcomes for disadvantaged groups because the amount paid is far too low to make a difference.

We will only see significant change when we move to a Universal Basic Income (UBI) so that the income of poorer groups rises above the UBI poverty level. They will then be more empowered to help their children, continue their studies, get better jobs and take advantage of income mobility opportunities.

This can be done through Padu, replacing existing ad-hoc, low-value welfare hand-outs based on arbitrary criteria with a single payment to top-up the income of people below the UBI level. This is credible and aligned with the consensus but commitment and communication are still essential. - FMT

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.