Prepared by Aliya Waheedah
17 October 2024
Credit photo : John Moeses Bauan
Recapping on Last Year’s Budget
Let’s take a leap into the future.
The year is 2040. You wake up feverish and walk to the clinic, only to find it full of the elderly. It is understaffed with doctors - everyone has to wait long hours before their consultation. It is a future of more retirees than workers, a healthcare system overburdened treating the elderly.
This is not an impossible reality - according to the United Nation Development Programme (UNDP), Malaysia is on the path to an ageing population with a significant rise in the percentage of citizens above 65 years old - by the year 2040, the percentage is projected to reach 14.5%.
Additionally, looking at the fertility landscape over the years, Malaysia has experienced a decline in the average number of children per woman, dropping from 4.9 children in 1970 to 1.6 children in 2021 (1). How well does our society really acknowledge the issues we may be facing, especially considering the declining birth rate and the increasing numbers of an ageing population? How ready is the country to manage healthcare expenditure at the expense of the nation's future?
Welfare Spending for Elders
With Budget 2025 on the horizon, there is a greater expectation on the government to materialise social care development for the elderly. Last year’s budget saw an increase of 1.4 per cent in the allocation for the health sector, assuming that it will continue to grow year on year. However, although there was an increase in budget, the country has yet to see any significant funding in the direction of health services for older persons (2).
RM41.2 Billion was allocated in last year’s budget to the healthcare sector and RM5.5 billion of the budget will be used with the aim to procure medicine supplies, consumables, reagents, and vaccines. Social welfare allocations can be seen through the Sumbangan Tunai Rumah (STR) Programme and rebates (3), however these were not specific to elderly persons. Specific allocation for this group remains a stark omission, leading to neglect and a lack of accessibility to social services. Recently, a news report revealed an elderly man was found dead in his home in Kepong, having gone unnoticed by everyone for four years (4). Adequate support for elderly medical services will go a long way in preventing this issue.
Intergenerational Equity and Taxation
We have certainly heard of multiple strategic incentives aimed at easing the financial well-being of an ageing population. However, in the long run what does this mean for our current working population?
These incentives are usually funded by the working population through tax contributions, potentially building on financial stress for working folk, particularly the middle class. For instance, individuals in higher-income brackets often have access to a range of financial tools and investment opportunities that allow them to optimise their resources more effectively. Those from T20 socioeconomic backgrounds are presumed to have other financial funds, together with savings and sturdy contributions to the Employees’ Provident Fund (5).
This means that while lower-income groups may rely on direct government support to address their financial challenges, those with higher incomes can utilise their business acumen and available resources to generate wealth and contribute to the economy in a different way. If you are part of the middle-income group, you may often find yourself ineligible for government incentives. Financial fatigue may affect your ability to live a comfortable life. This disparity in incentives raises questions about the overall equity of support systems and their long-term sustainability in addressing the diverse needs of the working population.
It is very crucial for the government to be able to balance these competing budget allocations for future sustainability, and to tackle the intergenerational challenge without directly increasing the burden of the working population.
The Impact of an Ageing Nation on Future Generations
On the other hand, how would an ageing nation impact future generations? Aside from the financial restraint of taxation, the younger generation would be compelled to feel that the idea of creating a family is such a burden to hold.
With the increasing cost of living, the financial burden of raising a child has become high for many families. This economic pressure makes it difficult for couples to afford the expenses associated with childcare, education, and other necessities. Additionally, there is a noticeable trend among younger couples who are choosing not to have children after marriage. This 'childless marriage' phenomenon reflects changing societal values and priorities, where personal freedom, career ambitions, and lifestyle choices are often placed above traditional expectations of starting a family." This issue is reflected in lower birth rates especially in the urban areas. Data has shown a declining pattern on fertility rates in 2022 where the total fertility rate (TFR) remained around 1.6 births per woman where it used to be 1.7 births two years previously (DoSM) (6).
Toward an ageing nation
As we embark on a new phase of demographic changes, proactive strategies need to be assessed in order to materialise the framework towards an ageing nation.
In Malaysia, there is already a policy that promotes active ageing and well-being for the elderly. This framework mainly focuses on five dimensions of wellbeing: economy for productive ageing, health for healthy ageing, spirituality for positive ageing, social aspects for active ageing and environment for supportive ageing.
However, the accessibility of this policy and whether it has reached its main goal remains a question.
There is an urgent call being made by Prof. Dr Rahimah Ibrahim, Director of Malaysian Research Institute on Ageing stating that some funds should specifically be allocated towards investments and policy creation. It would further boost the social welfare industry in support of social programmes aimed at helping elders who are living in isolation (7).
Stakeholders and policymakers will be keen to see whether the Budget 2025 addresses these urgent needs and allocates sufficient resources to enhance the existing framework for active ageing. Specifically, there is a pressing expectation for increased funding directed towards initiatives that promote social engagement for the elderly, improve healthcare access, and bolster community support systems. Such budgetary considerations will be pivotal in determining the effectiveness of current policies and ensuring they translate into tangible benefits for the ageing population.
References :
Bernama. (2024, July 12). Malaysia's Fertility Landscape Experiences Significant Changes - Dosm. Bernama. Retrieved October 6, 2024, from https://www.bernama.com/en/news.php?id=2316918
Maw, T. (2023, November 2). 2024 Budget: Health funding soars, but concerns arise over welfare spending for older adults. Retrieved October 6, 2024, from https://www.nst.com.my/opinion/letters/2023/11/974204/2024-budget-health-funding-soars-concerns-arise-over-welfare-spending
Malay Mail. (2023, October 16). Budget 2024: Women Ministry to ensure RM3.52b allocation reaches targeted groups, says minister. Malay Mail. Retrieved October 15, 2024, from https://www.malaymail.com/news/malaysia/2023/10/16/budget-2024-women-ministry-to-ensure-rm352b-allocation-reaches-targeted-groups-says-minister/96656
Raja Noraina. (2024, September 10). Man finds father's skeleton in Kepong apartment after four years | New Straits Times. The New Straits Times. Retrieved October 14, 2024, from https://www.nst.com.my/news/crime-courts/2024/09/1103983/man-finds-fathers-skeleton-kepong-apartment-after-four-years
Malaysia Now. (2024, April 1). Focus on the poor before checking welfare of T20 'eligible' for targeted subsidies, govt told | MalaysiaNow. Malaysia Now. Retrieved October 15, 2024, from https://www.malaysianow.com/news/2024/04/02/focus-on-the-poor-before-checking-welfare-of-t20-eligible-for-targeted-subsidies-govt-told
Kasinathan, S. (2023, October 17). DOSM: Malaysia's total fertility rate for 2022 reaches lowest in 50 years. Malay Mail. Retrieved October 7, 2024, from https://www.malaymail.com/news/malaysia/2023/10/17/dosm-malaysias-total-fertility-rate-for-2022-reaches-lowest-in-50-years/96810
Malaysia Now. (2024, April 1). Focus on the poor before checking welfare of T20 'eligible' for targeted subsidies, govt told | MalaysiaNow. Malaysia Now. Retrieved October 15, 2024, from https://www.malaysianow.com/news/2024/04/02/focus-on-the-poor-before-checking-welfare-of-t20-eligible-for-targeted-subsidies-govt-told
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