The US Congress finally passed the Health Care Reform Bill that will cost the government close to $1 trillion. This is a major US medical reform bill passed in the past 100 years of US history. The passing of the bill fulfilled President Obama's election promise to the people. In 2009, when US President Barack Obama took office, he pledged to the people that he "must tame this health care insurance monster."
Historic Step
In fact, to reform national health care insurance plan has become one of the hottest topics in the US politics in recent years. However at the time when the US Congress passed this historic health care reform bill to provide medical care for all US citizens, other countries such as Germany and France have instead passed their respective "saving and unity" acts to cut social welfare expenditures in response to the plight of financial and economic downturn.
The respective cut in social welfare and unemployment allowance fund by Germany and France was as high as $20 billion respectively. It was also the second time since the Second World War that these two European nations have cut their social welfare funds to their citizens. Coincidentally, earlier this year, South Korea has also released a document entitled "Affordable health insurance white paper." This white called on the people to reduce dependence on social welfare.
Political Gimmick
The experience of the United States, Germany, France, Korea and other countries in dealing with social welfare and medical care issues is a good reminder for Malaysia's ruling and opposition parties to stop those political gimmick and competition of "cashing out social welfare checks for votes" during general election campaign . It is important for Malaysia to use its limited financial resources to give priority to look after the truly unfortunate people and disadvantaged groups in the community first so that the well being of all citizens can be safeguarded.
Along with economic development, when a country's national income increases, the government must in due course gradually offer various social welfare measures to strengthen the care for the vulnerable groups in order to achieve the social fairness and justice ideals. But social welfare plan is by no means a free lunch. Once implemented, it is difficult for a country to amend or cancel. As such the implementation of it must be cautious. As the government itself is non-productive, every single dollar the government spends will finally have to come from tax payers' pockets. For this reason alone, when a government makes plans for social welfare or health care improvement, it must carefully plan them within its financial means.
Distribution of Social Welfare Fund
Malaysia's social welfare budget is on the lower side as compared with other countries and Malaysia also has the phenomenon of operating an uneven distribution of social welfare fund. It is time for Malaysia to make adjustment to its current social welfare system. However, according to Malaysia's current reality, if the government wants to implement any social welfare measure, it cannot take a universal and parallel approach; otherwise, Malaysia might repeat some of the mistakes made by some other countries.
When a country implements social welfare and health care plan without looking into the actual financial situation of the nation, such social welfare or health care promise cannot be effectively carried out. It is only good to look at but cannot satisfy actual need. Moreover, if this country tries to force this social welfare package through under acute financial shortage, such measure might even lead to financial bankrupt, Future generation of the country will also suffer eventually.
In general, social welfare can be divided into social assistance and social insurance. Social assistance is to help the socially disadvantaged groups to maintain a minimum standard of living with human dignity. The expenditure of it is generally absorbed by the government through the existing tax revenue. On the other hand, social insurance is a collective effort taken by the government and the people collectively in coming out with a plan to reduce human emergency and risk in time of need. The principle in maintaining such a social insurance plan is based on self-supporting and contribution of fund from the government people.
In case of Malaysia, the premium and coverage of social insurance plan accorded to people are low. In time of need the insufficient insurance fund coverage will have to come out from the Government's social assistance fund. If Malaysian Government continues to come out with such new social welfare measure, it will have a lasting impact to the government's financial soundness status.
Government's Commitment
In recent years, under pressure from the Parliament, Malaysian Government has adopted a number of tax cuts, coupled with the economic downturn, the federal budget has shown significant imbalance in revenue and expenditure. With the government expenditure continues to expand, the federal financial situation is deteriorating rapidly with government debt now amounting to $336 billion ringgit. This federal debt has reached 7.4 percent of Gross Domestic Product (GDP). This is the highest percentage in the past 20 years.
Since the social welfare budget is the Government's recurrent expenditure, and therefore Malaysian Government's federal budget for next year is also not very promising. Next year, the government's commitment to expand social allowance and disability allowance to the low-income elderly will require a budget of about $1 billion ringgit to support.
Efforts to Carry Out Plan
However, the government's effort to carry out prudent spending through levying taxes on consumer goods and to reduce fuel subsidies has not produced good result.
Although there is a need for the government to impose the reasonable Goods and Services Tax, but as it stands now, it will be difficult for this Goods and Services Tax to get through the Parliament now. In the end, all kinds of policy promises that the government intends to implement will have to be reduced or even let go. Such situation will further lead to more disputes by the society.
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