KUALA LUMPUR, Sept 10 — Insurance and economic experts are urging the government to redirect subsidies, like those for sugar and petrol, to fund social health insurance for senior citizens.
Ravinder Singh, a reinsurance specialist with over 30 years of experience in London, Amsterdam, Zurich, Singapore and Kuala Lumpur, proposed using the RM600 million sugar subsidy to support long-term care for the elderly, citing Singapore’s ElderShield as a model.
“ElderShield in Singapore started in 2002. Two companies, Great Eastern and NTUC, were involved, and both were supported by offices in KL,” Ravinder said at the Seterra Dialogue 2024 National Caregivers Conference last August 8.
“I was personally involved in pricing the product. It has evolved over the past 20 years, but it’s a model we can build on.”
Ravinder, who is currently co-founder and chief commercial and marketing officer of AQM Technologies, highlighted the need for both private sector and government funding to support such insurance.
He argued that Malaysia’s sugar subsidy is unnecessary, as it contributes to health issues, and that reallocating it to benefit the public would be a better option.
“Removing the sugar subsidy could cause problems, which is why the government is hesitant about it. But if it’s directed towards a cause that helps the rakyat, then things will move much faster,” Ravinder said.
He also proposed increasing taxes on alcohol and cigarettes as additional funding sources to support elderly care.
Chief statistician Mohd Uzir Mahidin reportedly said last Friday that Malaysia was heading towards an aged nation sooner than expected, estimating that 17.3 per cent of the population will be aged 60 and older in 2040, or 6.4 million people.
This year, those aged 60 and above comprise 11.6 per cent (3.9 million people) of Malaysia’s 34.1 million population.
Malaysia Bucks Trend With Falling Consumption Taxes
Prof Norma Mansor, director of Universiti Malaya’s Social Wellbeing Research Centre, agreed that subsidies should be rationalised and redirected toward social protection, particularly long-term care.
Norma said that Malaysia’s direct taxes are higher than those in Singapore and Thailand, but public sector spending lags behind other regions due to lower tax collection.
“Our direct taxes are very high, I mean comparable – our individual and corporate taxes are higher than those in Singapore and Thailand. Our social contribution rate is also quite high, at about 24 per cent.
“However, our public sector expenditure is lower than Sub-Saharan Africa because the taxes we collect are also lower than in Sub-Saharan Africa,” Norma said.
She added that while direct taxes are rising, consumption taxes are falling, a trend she said is opposite to what is seen in other countries.
“The way the graph looks for Malaysia, in terms of corporate and individual taxes, which are direct taxes, is that they are increasing, but general taxation, like consumption tax, is going down.
“This is the opposite of what’s happening in other countries where, as the country gets richer, the taxes and revenue increase,” Norma said.
“These are some of the conversations we are having with the government. A lot can be done, and the government shouldn’t do everything. They should co-create or co-pay for some services, as it is possible.”
Health Minister Dzulkefly Ahmad announced last month a proposal to raise the tax on sugar-sweetened beverages (SSB) to 20 per cent, but no move to cut subsidies.
Galen Centre for Health and Social Policy chief executive Azrul Mohd Khalib criticised this as inconsistent, noting that sugar prices in Malaysia remain among the lowest globally due to price caps set at RM2.85 per kg for coarse sugar and RM2.95 per kg for refined sugar.
At the 2024 National Wellness Month celebration in Port Dickson, Negeri Sembilan, last Sunday, Prime Minister Anwar Ibrahim, who is also finance minister, did not announce floating sugar prices, nor approval to raise the SSB tax. Instead, he merely told people to reduce their sugar intake and to exercise more.
In June, Anwar said no decision has been made on rationalising RON95 fuel subsidies, with current focus on electricity, poultry, and targeted diesel subsidies.
Potential Growth of Silver Economy: Deputy Minister
Deputy Economy Minister Hanifah Hajar Taib highlighted the significant challenges Malaysia faces due to the global ageing population trend, including limited social protection coverage.
In her keynote address, Hanifah pointed out that long-term care (LTC) services are inadequate to meet increasing demand, and the care ecosystem remains insufficiently developed. She cited issues such as outdated legislation, outdated licensing processes, and a lack of accreditation for caregiving careers, which contribute to a shortage of skilled professionals.
To tackle these challenges, the Ministry of Economy, in collaboration with other ministries, agencies, and stakeholders, is crafting the National Ageing Blueprint. The action plan, set to be completed by the end of 2024, will provide strategies and policies for addressing the ageing population in the short, medium, and long term.
“We should view the ageing population challenge as an economic opportunity, including the potential growth of the ‘silver economy’ to enhance overall wellbeing and productivity in the country,” Hanifah said.
Hanifah noted that the silver economy is rapidly expanding in Southeast Asia, with global market potential estimated at US$4.56 trillion (RM19.75 trillion) by 2025, and US$25.5 billion specifically in Malaysia.
Kendana Malaysia Launches To Support Malaysian Caregivers
The event also marked the launch of Kendana Malaysia, the Malaysian Caregivers Association, a non-profit organisation dedicated to supporting Malaysian caregivers.
Kendana Malaysia chairman Rashidi Yahya said its mission is to promote education and training by standardising training programmes and raising educational standards to ensure caregivers are well-equipped to deliver high-quality care.
The organisation also aims to advocate for caregiver rights by raising awareness of their challenges and pushing for supportive policies.
Rashidi said the significance of Kendana’s work lies in the fact that caregivers play a crucial role in the aged and health care systems, yet their contributions are often overlooked.
“Kendana Malaysia strives to address this issue by ensuring that caregivers receive the respect, training, and support they need. Looking to the future, Kendana envisions a Malaysia where caregiving is a respected and integral career.
“Through standardised training, fair rewards, and the integration of caregivers into the formal health system, Kendana aims to transform the caregiving landscape and improve the overall wellbeing of the nation,” Rashidi said.
