The govt could introduce GAP, which can be funded by CGT on the ultra-rich, to address the issue of old age poverty 

Pic by MUHD AMIN NAHARUL

FOR decades, the issue of old age poverty had been left unaddressed to become a chronic national crisis. 

According to the Employees Provident Fund, about 13.6 million of its members cannot afford to retire. That figure does not include precarious workers and agri-food producers. The rising old age poverty can be addressed by introducing golden age pension (GAP). Society needs to weigh the overall benefits of such social advancement policy. 

GAP Slows Down Aging Society 

According to the World Bank, Malaysia will become a “super-aged society” as 20% of the population will be above the age of 65 by 2056. 

This megatrend is caused by rising life expectancy microtrend coupled with declining birth rate microtrend. Since 2013, Malaysia’s fertility rate has fallen below the replacement rate of two children per woman. 

Young adults born after 1983s are saddled with student loans, rising housing prices, soaring inflation, stagnant wages and job insecurity. The policies usually take about one generation (30 years) to impact the national fertility rate. 

In Asian culture, children are expected to provide for their financially insecure senior citizens, increasing the financial stress. Hence, youths are getting married older and bearing less children to avoid deeper financial stress. The trend of childless couples is rising exponentially not purely because of choice, but because of cost. GAP will ease the financial stress on young adults to allow fertility rates to rise again. 

GAP Speeds Up Modernisation 

Senior citizens with certain obsolete means of production to resist new technology. One such example is taxi drivers assaulting and preventing e-hailing drivers. 

Meanwhile, senior citizens owned small businesses resisting strategic infrastructure such as widening of roads, realignment of railways, urban redevelopment and etc. These senior citizens resist and agitate against progress to protect their sole “bread and butter”. 

Small business and taxi drivers earn too little to save or invest for old age, so they work to death. The loss of existing means of production will make their life more miserable. Hence, the senior citizens “stand and fight” against modernisation which does not benefit them because it is “do or die”. GAP will allow senior citizens to accept progress and speed up modernisation of Malaysia. 

GAP Reduces Food Prices 

Senior citizens with smallholder agriculture lands and sea-fishing licenses are surviving by renting out their lands and boats, respectively, to young people and undocumented migrants. 

The senior citizens will neither surrender nor allow new sea-fishing boats or farming land to protect their meagre rental income. 

The “rent-to-live” introduces new input costs on agriculture produces increasing food prices. GAP will dismantle the resistances to allow lands and boats to move into the hands of the next generation without rental cost. 

GAP Reduces Inequality 

GAP provides income for senior citizens in small towns and rural suburbs. This increases the base disposable income in those towns and rural areas which increase productive spending on essentials such as foods, groceries and home repairs. Subsequently, creating and sustaining small business and jobs to narrow the urban-rural inequality. 

Rising labour surplus caused by the rural to urban migration coupled with absence of collective bargaining stalls wage growth. Hence, widening inequality between labour and capital. GAP creates and sustains small business and jobs in small towns and rural areas to reduce the rural to urban migration putting upward pressure on wages. Hence, GAP will narrow labour-capital inequality. 

GAP Reduce Homelessness and Begging

Contrary to mainstream narratives, old-age homelessness and begging are not rooted in laziness. Since the 1980s, the government has forced industrial workers to accept low wages and poor working conditions to allow Malaysia to “get rich first”. The low salary prevented them from saving for retirement or purchasing a home. Meanwhile, many of the former high-risk industry workers were unable to bear children due to pollution and poor working conditions. 

These workers had sacrificed their life to make Malaysia the 40th richest country on Earth. Today, the senior citizens are left to live and/or beg on the streets. Meanwhile, certain right-wing politicians labelled the senior citizens as lazy to avoid taking responsibility. GAP will end old age homelessness and begging for good. 

Moving Forward 

There is a need for different interventions such as GAP to close the income gap between working age and death age. The discussed benefits of GAP onto our society are merely the tip of the iceberg. The federal government could introduce GAP which can be funded by capital gain taxes (CGT) on the ultra-rich. 

The World Bank highlighted in its Economic Monitor (December 2021) that Malaysia had achieved the material condition to tax capital gains and inheritances as a form of redistributive mechanism. CGT does not impact 99% of the population compared to the regressive Good & Service Tax. 

• Sharan Raj
  Human rights activist, environmentalist and infrastructure policy analyst. 

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The views expressed are of the writer and do not necessarily reflect the stand of the newspaper’s owners and editorial board.