LETTER | Benefits of Golden Age Pension

LETTER | For decades, the issue of old-age poverty had been left unaddressed for to become a chronic national crisis. According to Employees Provident Fund (EPF), about 13.6 million of its members cannot afford to retire.

That figure does not include those who work in dangerous jobs and food producers. The rising old-age poverty can be addressed by introducing Golden Age Pension (GAP). Society needs to weigh the overall benefits of such social advancement policy.

GAP slows down aging society

According to World Bank, Malaysia will become a “super-aged society” as 20 percent of the population will be above the age of 65 years old by 2056.

This megatrend is caused by a rising life expectancy microtrend coupled with a declining birth rate microtrend. Since the year 2013, Malaysia's fertility rate has fallen below the replacement rate of 2.0 children per woman.

Young adults born after 1983s are saddled with student loans, rising housing prices, soaring inflation, stagnant wages and job insecurity.

This was a direct impact of privatisation and liberalisation during Mahathir’s first regime. These policies usually take about one generation (30 years) to impact the national fertility rate.

In Asian culture, children are expected to provide for their financially insecure senior citizens increasing the financial stress. Henceforth, youths are getting married older and bearing fewer children to avoid deeper financial stress.

The trend of childless couples is rising exponentially not purely because of choice but because of cost. GAP will ease the financial stress on young adults to allow fertility rates to rise again.

GAP speeds up modernisation

Senior citizens with certain obsolete means of income resist new technology. One such example is taxi drivers assaulting and preventing e-hailing drivers.

Meanwhile, senior citizens who owned small businesses resist strategic infrastructure such as widening of roads, realignment of railways, urban redevelopment etc. These senior citizens resist and agitate against progress to protect their sole “bread and butter”.

Small businesses and taxi drivers earn too little to save nor invest for old age, so they work to death. The loss of existing means of production will make their life more miserable.

Henceforth, the senior citizens “stand and fight” against modernisation which does not benefit them because it is “do or die”. GAP will allow senior citizens to accept progress and speed up the modernisation of Malaysia.

GAP reduces food prices

Senior citizens with smallholder agriculture lands and sea-fishing licenses are surviving by renting out their lands and boats respectively to young people and undocumented migrants.

The senior citizens will neither surrender nor allow new sea-fishing boats or farming land to protect their meagre rental income. The "rent-to-live” introduces new input costs to agriculture and increases food prices.

GAP will dismantle the resistance to allow lands and boats to move into the hand of next-generation without rental cost.

GAP reduces inequality

GAP provides income for senior citizens in small towns and rural suburbs. This increases the base disposable income in those towns and rural areas which increases productive spending on essentials such as food, groceries and home repairs.

Subsequently, creating and sustaining small businesses and jobs to narrow the urban-rural inequality.

Rising labour surplus caused by rural to urban migration coupled with the absence of collective bargaining stalls wage growth. Henceforth, widening inequality between labour and capital.

GAP creates and sustains small businesses and jobs in small towns and rural areas to reduce rural to urban migration putting upward pressure on the wages. Henceforth, GAP will narrow labour-capital inequality.

GAP reduces homelessness and begging

Contrary to mainstream narratives, homelessness and begging are not rooted in laziness. Since the 1980s, the government forced industrial workers to accept low wages and poor working conditions to allow Malaysia to “get rich first”.

The low salary prevented them from saving for retirement or purchasing a home. Meanwhile, many of the former high-risk industry workers were unable to bear children due to pollution and poor working conditions.

These workers had sacrificed their lives to make Malaysia the 40th richest country on Earth. Today the senior citizens are left to live and/or beg on the streets. Meanwhile, certain right-wing politicians labelled the senior citizens as lazy to avoid taking responsibility. GAP will end old age homelessness and begging for good.

Moving forward

There is a need for different interventions such GAP to close the income gap between working age and death age. The discussed benefits of GAP in our society are a mere tip of the iceberg. The federal government could introduce GAP which can be funded by capital gain taxes on the ultra-rich.

The World Bank highlighted in its Economic Monitor (December 2021) that Malaysia had achieved the material condition to tax capital gains and inheritances as a form of redistributive mechanism. Capital gain taxes does not impact 99 percent of the population compared to regressive Good & Service Tax.

Sharan Raj is a human rights activist, environmentalist and infrastructure policy analyst.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.