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Monday, October 20, 2014

Cashless BR1M? No go, say recipients, it won’t pay utility or medical bills

Putrajaya’s plans to adopt a cashless system to prevent misuse and restrict BR1M purchases to essential goods have not gone down too well with recipients, who say there are few who misuse the cash for luxury items. – The Malaysian Insider pic by Afif Abd Halim, October 20, 2014.Putrajaya’s plans to adopt a cashless system to prevent misuse and restrict BR1M purchases to essential goods have not gone down too well with recipients, who say there are few who misuse the cash for luxury items. – The Malaysian Insider pic by Afif Abd Halim, October 20, 2014.
With mouths to feed, medicines to purchase and a monthly salary that can only stretch so far, luxury items such as smart phones are the last thing on the shopping list of strapped, low-income recipients of the 1Malaysia People’s Aid (BR1M) cash aid.
Hence, Putrajaya’s plans to adopt a cashless system to prevent misuse and restrict BR1M purchases to essential goods came as a rude and unwelcome surprise to most BR1M recipients polled by The Malaysian Insider.
“The government is treating the rakyat like children, as if we cannot be trusted with money,” taxi driver M. Manickam, 56, said.
At present, BR1M, which is to help households earning below RM4,000 a month, is given out in the form of cash and deposited directly into recipients' bank accounts.
Putrajaya is mulling adopting the American food-stamp system, whereby cash vouchers are issued to deserving individuals to buy groceries, so as to maximise BR1M’s efficacy.
Tengku Nazzat Tengku Abdullah, 63, is against food stamps because she needs the BR1M cash to buy her diabetes medicines. – The Malaysian Insider pic, October 20, 2014.Tengku Nazzat Tengku Abdullah, 63, is against food stamps because she needs the BR1M cash to buy her diabetes medicines. – The Malaysian Insider pic, October 20, 2014.But such a system would put an end to 63-year-old Tengku Nazzat Tengku Abdullah’s purchase of medicine and her freedom to continue driving.
“When I receive my BR1M, I use it to pay for my driving licence and road tax,” Tengku Nazzat, a BR1M recipient of two years, told The Malaysian Insider.
“I also suffer from diabetes. BR1M is the only chance I get to buy better medicine from the pharmacy, on top of the medicine I receive from the government hospital.”
The senior citizen from Klang, who is raising a son, said the handouts should remain in the form of cash as Malaysians relied on it to purchase a variety of goods, not just groceries.
Last Monday, Finance Ministry secretary-general Tan Sri Mohd Irwan Serigar Abdullah said BR1M would be restructured so that from 2016, low-income families could only buy essential goods.
Besides food stamps, he said Putrajaya was looking at parcelling out the aid on a monthly basis and crediting the amount to recipients’ MyKad for them to use at supermarkets.
He said the change in BR1M was necessary to prevent it being misused to buy luxury or items like cigarettes.
However, Doris James, 52, from Kuching, said she preferred cash and the freedom to spend BR1M as she wished.
“Why are they so worried about how we spend BR1M? The amount is not even much. It’s not like the amount is going to last a year.
“It’s so small that it could be spent in a single trip to the supermarket. Yes, gone in the blink of an eye,” said James, who is unemployed.
However, the government appears to take the issue of BR1M abuse seriously.
Deputy Finance Minister Datuk Ahmad Maslan said last Tuesday that BR1M would be paid out in instalments starting 2015 so that it would not be spent on luxuries like his own new iPhone 6.
Norbait Mohd Suid, 49, who depends on the aid to raise her children, scoffed at the idea of using the government handout to indulge on a mobile phone.
“Even if BR1M was paid in a lump sum instead of three instalments, I would not buy a mobile phone. I have two young children to raise, so there is no money to waste on such luxuries.
“It is not good if Putrajaya decides to give BR1M in the form of vouchers instead of cash,” said Norbait, who works as a doorman at the Swiss Garden Hotel.
Bus ticketing agent Shaari Ghani, 72, in Butterworth said he needed BR1M cash to pay his bills and for more flexibility.
"I can't pay my bills with coupons. I can do more with cash. The coupons will likely restrict purchases to only selected stores... it will inconvenience people, I think," he said.
Shaari said he understood that the government wanted to make sure the money would not be misused. However, the government should not make things complicated for the people, he said.
"Keep it in cash. Keep things simple. Recipients get a few hundred ringgit each, not tens of thousands.
"Probably only two or three people out of 10 might use the money on needless things. Most people would spend it on essentials," said Shaari.
Josh John says with vouchers, BR1M recipients might be limited to buying goods from specific stores, such as the Kedai Rakyat 1 Malaysia (KR1M). – The Malaysian Insider pic, October 20, 2014.Josh John says with vouchers, BR1M recipients might be limited to buying goods from specific stores, such as the Kedai Rakyat 1 Malaysia (KR1M). – The Malaysian Insider pic, October 20, 2014.Josh John, from Kuching, said that while he did not mind switching from cash to vouchers, he opposed the possibility that it be restricted it to specific stores, such as the Kedai Rakyat 1 Malaysia (KR1M).
“We need to be given the choice to buy where we want. It could be the apek grocery shop next to my house.
“KR1M is not near my home and I would be forced to burn fuel just to get to the nearest KR1M. Price of petrol had just gone up,” said the 51-year-old invalid, who is unemployed.
Bus driver Ahmad Fuad Abdullah, 41, also expressed reservations that BR1M vouchers may be used only at certain shops, saying this would encourage store owners to mark up prices and rake in profits.
“If the vouchers can be used at certain stores, we won’t have much choice. Usually, items at the supermarket are pricier, so shoppers have little purchasing power,” said Fuad, who lives in Bandar Baru Puchong.
The father of two said the system would also be unfair to those living in rural areas and were cut off from the town.
“Surely you’re not going to force them to go out of town just to use the vouchers?”
However, lorry driver S. Rubeswaran, 26, said the idea was acceptable to him because BR1M recipients could still buy their household needs with the vouchers.
"(However) I think many people will not like this cashless idea. Maybe it is easier for a single guy like me to accept. I don't smoke or drink so I don't need money for such things," he said.
The two-time BR1M recipient agreed that a cashless system would prevent the money from being misused by recipients, adding that many regarded the cash handouts like a bonus.
"They will use it as they like. I know of people who use the money for 'jalan-jalan' (go out and have fun) or to go on outstation trips, which I don't think is right.”
Under Budget 2015, BR1M was raised by RM300 to RM950 for households earning RM3,000 and below, and to RM750 for households earning between RM3,000 and RM4,000. Single individuals aged 21 and above who earn under RM2,000 get RM350.
Bus driver Ahmad Fuad Abdullah, 41, says BR1M vouchers might lead to profiteering. – The Malaysian Insider pic, October 20, 2014.Bus driver Ahmad Fuad Abdullah, 41, says BR1M vouchers might lead to profiteering. – The Malaysian Insider pic, October 20, 2014.The Federation of Malaysian Consumer Associations (Fomca) said food stamps were widely used in various countries to support the poor and to ensure that the money was spent on food.
Its chief executive officer, Datuk Paul Selvaraj, however, said the main issue was that BR1M was only of limited assistance. It did not cover other essential needs nor would it help end poverty.
"It should be noted that the amount given is not so substantial that there is enough for food and other needs.
"What is needed is a comprehensive social safety net that encompasses the needs of the marginalised and poor – thus including not only food but also public transport, healthcare, children’s education, housing and even assistance in employment to enable people to break out of poverty," Paul said.
Pakatan Rakyat think tank Institut Rakyat said the government’s proposal to switch to a cashless system still did not address the issue of eradicating poverty.
“This step would only perpetuate the structural obstacles that prevent someone from ‘graduating’ from poverty, and creates a dependence on government aid,” said its assistant research director Ginie Lim.
These structural obstacles include gender, race, class, education and even the geographical location of an individual, she said, adding that BR1M was not enough to resolve this.
“Institut Rakyat urges the government to focus on the country’s economy in increasing the rakyat’s disposable income, especially for the needy.
“Any programme to eradicate poverty should be based on the concept of ‘leaving poverty’… and not to create more programmes or more BR1M recipients, whether in the form of cash aid or food vouchers.”
She added that the food stamp system would only raise more complications, such as the issue of cronyism as only certain companies, such as KRIM, may be able accept food vouchers.
Households would also not be able to use the food coupons for emergencies, said Lim.
- TMI

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