WITH the RM100 e-wallet credit given to eligible Malaysians above 21 years old who earn less than RM100,000 per annum, this would have benefited at least 10 million Malaysians who are in the lower and middle-income group.
The amount may be just a small token for the M40 (middle-income group) but why is the M40 included in the government’s e-Madani cash handout? Is this even necessary? If it is not going to lift them up in any significant way, why is the M40 included?
This is the first time that Malaysians in the M40 are receiving the cash handout whether they are retired or otherwise. Prime Minister Datuk Seri Anwar Ibrahim has at least acknowledged that the M40 – despite paying the most taxes – are struggling to make ends meet.
It is human nature to complain. When given, RM100 is pittance for someone earning a salary of RM99,999.90 per annum (or the equivalent of RM8,333.25 every month) who despite short of 10 sen is still eligible to receive the e-Madani e-wallet credit.
While Malaysians have to learn never to depend on government handouts, an additional RM100 to the disposal income is something they ought to be grateful for although it actually comes from taxpayers’ money.
Five likely reasons for e-Madani
Reason #1: Politicians want political mileage out of the policies they implement. Anwar is no difference.
Reason #2: Why the e-Madani payout is made near year-end is likely due to the amount still remaining in the coffers. Savings or any unutilised budget at the end of the financial year is better utilised by pumping it back into the economy.
Eventually, this money will go through many hands to prime the economy bottom-up which will eventually benefit the T20 (higher income group) as well. This is because even a small token means a big amount to the country’s economy – RM1 bil to be exact – which will boost Malaysia’s gross domestic product (GDP).
Reason #3: Priming the economy using the “bottom-up” model means the government’s money is used to directly benefit 80% of the working adults. It also means less opportunity for corruption.
In the past, twice former premier Tun Dr Mahathir Mohamad focused only on the top-down economic model by trying to raise high net worth Bumiputera businessmen. However, the money that went into mega projects which were largely unproductive for they only trickled down slowly to the lower and middle-income group.
This only benefited a small group of well-connected people. And although the GDP in the 1980s and part of the 1990s was robust, it was clearly unsustainable. This only became obvious when the 1997 Asian Financial Crisis (AFC) hit this part of the world.
Reason #4: The two fiscal measures are equally important. Government pumping money into development of productive projects (top-down) will boost the country’s long term economic growth.
However, the money will not necessarily boost the consumer market. For one, it was never cascaded down as higher incomes for the B40 and M40 which make up 80% of the country’s adult population.
Besides, how much can the T20 individuals spend on food in the low-end food and beverage outlets? With RM1 bil, we will see certain sectors of the economy seeing growth. The bottom-up fiscal measure is probably intended to complement the top-down fiscal measure that previous governments in the past have implemented.
Reason #5. Finally, the way how the e-Madani cash handout was designed with a countdown towards Dec 4 shows that the unity government is to create buzz of excitement.
Certainly, this policy is also done to create support for the unity government to run the country for the next four years until we see some more significant reforms being carried out. Anwar’s performance will be judged based on his promises to deliver the reforms.
Could this bottom-up fiscal measure being one of the reforms that he is introducing? – Dec 5, 2023
Main pic credit: Info Terkini Bantuan