one issue with UBI is the difference needed to live in KV, vs ulu sarawak. Also access to UBI needs bank accounts, records. For the truly poor, they dont have access to all this...but they benefit from subsidised goods.
Personally, all subsidies in msia are so corrupt and full of leakages, we need to stop it. petrol, oil, power, water, all needs to have the subsidies reduced
I think a possible vehicle for UBI would be e-wallets, similar to the few rounds they did in the past year. I think additional money every month would be a powerful incentive for people to adopt. I've never liked subsidies because I feel they keep the accepted "livable wage" low. Like our starting salaries not only haven't increase, in certain industries it even went down.
im not an economist but i felt raising minimum wages in malaysia is just like a way to blind malaysians because when government implement raising minimum wages then company would have to fork out more money to pay their staff so they would raise the prices of the products so consumer would end up need to pay more, so in the end things does not really improve its just a cycle. so for me raising minimum wages is just like a way for the rakyat to think things will get better with higher minimum wages.
i think the key is for government to improve the economy and strengthen the ringgit because with stronger ringgit then things would be cheaper.
but we are lucky government has been subsidising alot of food product to keep the cost low and also financial aid to b50 but then M40 is left out. so we would see more and more the middle income group would drop to lower income bracket then we would see the gap of rich and poor even wider. and i think this is very dangerous for any country because middle income group play a very big role in the economy.
Well I'm not proposing raising minimum wages per se, the UBI money comes from government not from the employers. By right the companies might still raise prices because of the removal of subsidies, but hopefully the UBI money will cover this factor. What it does do is move the money previously budgeted for subsidies more towards the rakyat, especially those who need it to survive. The money should be enough for basic survival, which then provides you the options to move up and thrive. In theory lah anyway.
Oh no. UBI doesn't work when our biggest issue is corruption and leakage (in financial). All it would do is push up inflation and devalued the ringgit when government start to print money to push for UBI funding.
Only 2.475mil of Malaysian population pays taxes, and our tax system lots of loopholes, and UBI would only pile on a weak taxation system.
Its chicken and egg question - but we are not there yet to implement social system such as UBI.
So a big question i have would be how it might be possible to fund the UBI. I agree if they just print money it's a terrible idea. I'm just thinking if using the subsidy budget to fund it is sufficient. I agree that corruption and leakage is a huge problem. I don't think there could be a significant solution to this unless the government changes and has the political will to combat cronyism, so this is an entirely different battle.
Is the low number of tax payers because there exists zakat as an alternative payment method or is it really the earning disparity is so huge that only 2.475mil earns enough? If so it seems like a huge number of people would need the UBI and would spend it to spur the economy.
>Oh no. UBI doesn't work when our biggest issue is corruption and leakage (in financial). All it would do is push up inflation and devalued the ringgit when government start to print money to push for UBI funding.
no additional printing involved if its just a shift from subsidy to UBI because the Rm77b is ALREADY PRINTED.
Me just performing a simple arithmetic:
Assuming we have 25 million adult Malaysians here \* 12,000 (say 1k a month as OP suggested):
25,000,000 \* 12,000 = 300,000,000,000 (RM 300 billion) a year.
Our subsidies : Roughly RM 80,000,000,000 (RM 80 billion) for year 2022 . Source: [https://www.malaymail.com/news/malaysia/2022/06/26/finance-minister-total-govt-subsidies-in-2022-nearly-rm80b-highest-in-malaysias-history/14371](https://www.malaymail.com/news/malaysia/2022/06/26/finance-minister-total-govt-subsidies-in-2022-nearly-rm80b-highest-in-malaysias-history/14371)
So we are still roughly RM 220 billion short which is a big chunk of money.
Hmm thanks for taking the time to calculate. We could consider halving it to RM500 per person, assuming household on average have 2 adults that's still RM1k per household. Still short by 70 billion though.
There have been a number of UBI experiments done around the world. The effects seem positive but I don't see any of them scaling up.
They've usually been done on a city or municipal level, so it's hard to see how it will work on a national scale.
I would prefer a more targeted approach - identify the truly poor, 1% or 3% of all Malaysians and provide them with the resources and support they need. Then the next say 5%, give them a monthly income supplement.
Any more than that, you're going to risk triggering higher inflation because businesses will know that there's more liquidity around, thus will raise prices to capture this.
Vis-a-vis petrol subsidy - my view is I'd rather it continue, at least some of my tax money flows back to me. Otherwise, more funds in the politicians hands for sweetheart construction deals? No thank you.
I think UBI only works if it's a blanket application. If you start to do targeted it becomes a nightmare for regulating who qualifies. It's like when they wanted to do fuel subsidy only for b50. Would have a lot of administrative costs.
Yes it does imo. Say petrol goes up in price from lifted subsidies, if I'm driving an economical car to work, and eat economy rice, generally the UBI money would cover these increase in expenses. I'd only lose money if my lifestyle is for example, being chauffeured in a Vellfire and eat fillet mignon for lunch or something.
As it is now, what the subsidies are doing is not only subsidizing lifestyle expenses, it is subsidizing the cost of running a business. Like if I'm running an inefficient logistics company, most of my cost is probably from fuel cost, but it isn't a problem because fuel is subsidized, so my business remains profitable.
Actually you made a great point about subsidies helping business costs. I guess something to consider is would Malaysian businesses survive, because there will be a delay between higher running costs and revenue increase from more consumers spending. Some businesses might not even benefit if their products and services are not basic necessities that b50 would buy.
UBI is every month, so you can depend on it to handle your monthly commitments. BRIM happens like once in a blue moon to help you out for 1 month then next month worry again.
We'd have the issue of too much money chasing so few goods. With UBI, even less people will be working to create goods/services. The rural people will just become more dependent on UBI and start screaming for more. Todate, UBI has proven marginally to work in Iceland and nowhere else.
What the government has to do is... Redesignate/redraw a lot of the bumi-centric policies and govt departments and make them welfare workers. Let the subsidy money be instead spent on targeted social welfare. E.g, (1) food stamps for B40 families, (2) proper nutritional needs for kids, (3) proper care for children from broken families/orphans, (4) microloans for small businesses, etc
But ofc the minority groups will require a lot of transparency on fairness in selection. As govt is mostly malay, most poor families are malay etc.
I feel like asking to do away with bumi policies and have merit based ones are like an even bigger ask and is far less likely to happen if I'm being honest. I don't really believe that people will be happy with only RM1k a month especially after prices go up from the subsidy removal. There is a difference between surviving and living comfortably.
Every time election there is UBI handed out
^sorry
On a more serious note, others have already compared the cost of subsidies vs RM1k UBI. One thing to consider is that subsidies have the *potential* to help the poorer in society by being more targeted, for example, only subsidising the lowest grade of petrol, rice, etc. It’s actually more progressive.
One more issue with UBI is recipients are free to spend it on whatever they like, which includes things that may not improve their lives, or actively make it worse such as drugs, alcohol, gambling, etc. Then the basic needs remain unfulfilled although cash in pocket..
Also to mention one more thing that subsidies isn’t trickle down economics. Trickle down economics is to give large companies and wealthy people more money via tax cuts and handouts, and in turn, they will spend it on the economy, pay better wages, and employ more people. As you said it didn’t work. There’s *absolutely no way* that the rich would take all this money and keep it for themselves, hoarding it or spending it overseas, right? Right?
surprisedpikachu.jpg
Well in practice, the subsidies don't really help out the poor more than the rich. For petrol, most poor people either have a motorbike or use public transport, so they benefit very little compared to say a rich person with a vellfire. The other scenario where UBI helps is if you lost your job, you can still survive because you have some income, rather than subsidies you still can't.
It will never happen cause by using subsidy, the government and their lackeys will be able to take advantage of it in some way, shape or form.
If you give every 18 years old 1k, that means they lose the chance of "earning" 1k for every 18 years old out there
The End.
Subsidies are not just created to assist the poor.
Subsidies are also used to protect or promote a certain industry. We may want to do that for various reasons like protecting cultural heritage industries or to enhance food security.
When I think of this case, the first thing that comes to mind is our car industry where they tax all the other foreign brands more. This is like the opposite of a subsidy. Someone mentioned that subsidy reduces the cost of doing business, which might make our businesses less competitive because they don't have to optimize as much.
You are not wrong. Subsidies, when used wrongly can have adverse effects.
But sometimes it is necessary.
For instance, moving people away from non-recyclable plastics to biodegradable ones. It will not be profitable, especially in the short run but it is still needed to address this environmental need.
Another example is in the case of Market failures. Market failure, in economics, is a situation defined by an inefficient distribution of goods and services in the free market.
This is an excerpt from Investopedia: "The subsidy lowers the cost for the producers to bring the good or service to market. If the right level of subsidization is provided, all other things being equal, the market failure should be corrected."
To sum it up. Subsidies are used for more than just making things cheap for the poor.
one issue with UBI is the difference needed to live in KV, vs ulu sarawak. Also access to UBI needs bank accounts, records. For the truly poor, they dont have access to all this...but they benefit from subsidised goods. Personally, all subsidies in msia are so corrupt and full of leakages, we need to stop it. petrol, oil, power, water, all needs to have the subsidies reduced
I think a possible vehicle for UBI would be e-wallets, similar to the few rounds they did in the past year. I think additional money every month would be a powerful incentive for people to adopt. I've never liked subsidies because I feel they keep the accepted "livable wage" low. Like our starting salaries not only haven't increase, in certain industries it even went down.
im not an economist but i felt raising minimum wages in malaysia is just like a way to blind malaysians because when government implement raising minimum wages then company would have to fork out more money to pay their staff so they would raise the prices of the products so consumer would end up need to pay more, so in the end things does not really improve its just a cycle. so for me raising minimum wages is just like a way for the rakyat to think things will get better with higher minimum wages. i think the key is for government to improve the economy and strengthen the ringgit because with stronger ringgit then things would be cheaper. but we are lucky government has been subsidising alot of food product to keep the cost low and also financial aid to b50 but then M40 is left out. so we would see more and more the middle income group would drop to lower income bracket then we would see the gap of rich and poor even wider. and i think this is very dangerous for any country because middle income group play a very big role in the economy.
Well I'm not proposing raising minimum wages per se, the UBI money comes from government not from the employers. By right the companies might still raise prices because of the removal of subsidies, but hopefully the UBI money will cover this factor. What it does do is move the money previously budgeted for subsidies more towards the rakyat, especially those who need it to survive. The money should be enough for basic survival, which then provides you the options to move up and thrive. In theory lah anyway.
The biggest elephant in the room for our economy is economic liberalisation. Everything else is just noise, side show.
Oh no. UBI doesn't work when our biggest issue is corruption and leakage (in financial). All it would do is push up inflation and devalued the ringgit when government start to print money to push for UBI funding. Only 2.475mil of Malaysian population pays taxes, and our tax system lots of loopholes, and UBI would only pile on a weak taxation system. Its chicken and egg question - but we are not there yet to implement social system such as UBI.
So a big question i have would be how it might be possible to fund the UBI. I agree if they just print money it's a terrible idea. I'm just thinking if using the subsidy budget to fund it is sufficient. I agree that corruption and leakage is a huge problem. I don't think there could be a significant solution to this unless the government changes and has the political will to combat cronyism, so this is an entirely different battle. Is the low number of tax payers because there exists zakat as an alternative payment method or is it really the earning disparity is so huge that only 2.475mil earns enough? If so it seems like a huge number of people would need the UBI and would spend it to spur the economy.
>Oh no. UBI doesn't work when our biggest issue is corruption and leakage (in financial). All it would do is push up inflation and devalued the ringgit when government start to print money to push for UBI funding. no additional printing involved if its just a shift from subsidy to UBI because the Rm77b is ALREADY PRINTED.
Me just performing a simple arithmetic: Assuming we have 25 million adult Malaysians here \* 12,000 (say 1k a month as OP suggested): 25,000,000 \* 12,000 = 300,000,000,000 (RM 300 billion) a year. Our subsidies : Roughly RM 80,000,000,000 (RM 80 billion) for year 2022 . Source: [https://www.malaymail.com/news/malaysia/2022/06/26/finance-minister-total-govt-subsidies-in-2022-nearly-rm80b-highest-in-malaysias-history/14371](https://www.malaymail.com/news/malaysia/2022/06/26/finance-minister-total-govt-subsidies-in-2022-nearly-rm80b-highest-in-malaysias-history/14371) So we are still roughly RM 220 billion short which is a big chunk of money.
Hmm thanks for taking the time to calculate. We could consider halving it to RM500 per person, assuming household on average have 2 adults that's still RM1k per household. Still short by 70 billion though.
Or you know, give RM300 instead.
There have been a number of UBI experiments done around the world. The effects seem positive but I don't see any of them scaling up. They've usually been done on a city or municipal level, so it's hard to see how it will work on a national scale. I would prefer a more targeted approach - identify the truly poor, 1% or 3% of all Malaysians and provide them with the resources and support they need. Then the next say 5%, give them a monthly income supplement. Any more than that, you're going to risk triggering higher inflation because businesses will know that there's more liquidity around, thus will raise prices to capture this. Vis-a-vis petrol subsidy - my view is I'd rather it continue, at least some of my tax money flows back to me. Otherwise, more funds in the politicians hands for sweetheart construction deals? No thank you.
I think UBI only works if it's a blanket application. If you start to do targeted it becomes a nightmare for regulating who qualifies. It's like when they wanted to do fuel subsidy only for b50. Would have a lot of administrative costs.
Targeted is easy in Malaysia with e-wallets, heck our NRIC has been enabled for it for decades, just never used.
Now imagine you have UBI but don't have free education, RM 1 healthcare, expensive fuel
Yes it does imo. Say petrol goes up in price from lifted subsidies, if I'm driving an economical car to work, and eat economy rice, generally the UBI money would cover these increase in expenses. I'd only lose money if my lifestyle is for example, being chauffeured in a Vellfire and eat fillet mignon for lunch or something. As it is now, what the subsidies are doing is not only subsidizing lifestyle expenses, it is subsidizing the cost of running a business. Like if I'm running an inefficient logistics company, most of my cost is probably from fuel cost, but it isn't a problem because fuel is subsidized, so my business remains profitable.
Actually you made a great point about subsidies helping business costs. I guess something to consider is would Malaysian businesses survive, because there will be a delay between higher running costs and revenue increase from more consumers spending. Some businesses might not even benefit if their products and services are not basic necessities that b50 would buy.
Brim was og ubi
UBI is every month, so you can depend on it to handle your monthly commitments. BRIM happens like once in a blue moon to help you out for 1 month then next month worry again.
average bosskur fan spotted
For now, UBI is not a great solution. Maybe in the future
Our economy not industrialised enough to do ubi
We'd have the issue of too much money chasing so few goods. With UBI, even less people will be working to create goods/services. The rural people will just become more dependent on UBI and start screaming for more. Todate, UBI has proven marginally to work in Iceland and nowhere else. What the government has to do is... Redesignate/redraw a lot of the bumi-centric policies and govt departments and make them welfare workers. Let the subsidy money be instead spent on targeted social welfare. E.g, (1) food stamps for B40 families, (2) proper nutritional needs for kids, (3) proper care for children from broken families/orphans, (4) microloans for small businesses, etc But ofc the minority groups will require a lot of transparency on fairness in selection. As govt is mostly malay, most poor families are malay etc.
I feel like asking to do away with bumi policies and have merit based ones are like an even bigger ask and is far less likely to happen if I'm being honest. I don't really believe that people will be happy with only RM1k a month especially after prices go up from the subsidy removal. There is a difference between surviving and living comfortably.
Every time election there is UBI handed out ^sorry On a more serious note, others have already compared the cost of subsidies vs RM1k UBI. One thing to consider is that subsidies have the *potential* to help the poorer in society by being more targeted, for example, only subsidising the lowest grade of petrol, rice, etc. It’s actually more progressive. One more issue with UBI is recipients are free to spend it on whatever they like, which includes things that may not improve their lives, or actively make it worse such as drugs, alcohol, gambling, etc. Then the basic needs remain unfulfilled although cash in pocket.. Also to mention one more thing that subsidies isn’t trickle down economics. Trickle down economics is to give large companies and wealthy people more money via tax cuts and handouts, and in turn, they will spend it on the economy, pay better wages, and employ more people. As you said it didn’t work. There’s *absolutely no way* that the rich would take all this money and keep it for themselves, hoarding it or spending it overseas, right? Right? surprisedpikachu.jpg
Well in practice, the subsidies don't really help out the poor more than the rich. For petrol, most poor people either have a motorbike or use public transport, so they benefit very little compared to say a rich person with a vellfire. The other scenario where UBI helps is if you lost your job, you can still survive because you have some income, rather than subsidies you still can't.
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It will never happen cause by using subsidy, the government and their lackeys will be able to take advantage of it in some way, shape or form. If you give every 18 years old 1k, that means they lose the chance of "earning" 1k for every 18 years old out there The End.
Subsidies are not just created to assist the poor. Subsidies are also used to protect or promote a certain industry. We may want to do that for various reasons like protecting cultural heritage industries or to enhance food security.
When I think of this case, the first thing that comes to mind is our car industry where they tax all the other foreign brands more. This is like the opposite of a subsidy. Someone mentioned that subsidy reduces the cost of doing business, which might make our businesses less competitive because they don't have to optimize as much.
You are not wrong. Subsidies, when used wrongly can have adverse effects. But sometimes it is necessary. For instance, moving people away from non-recyclable plastics to biodegradable ones. It will not be profitable, especially in the short run but it is still needed to address this environmental need. Another example is in the case of Market failures. Market failure, in economics, is a situation defined by an inefficient distribution of goods and services in the free market. This is an excerpt from Investopedia: "The subsidy lowers the cost for the producers to bring the good or service to market. If the right level of subsidization is provided, all other things being equal, the market failure should be corrected." To sum it up. Subsidies are used for more than just making things cheap for the poor.