KUALA LUMPUR (July 27): A health and social policy research centre expressed fear today that a lower government income from the switch back towards the Sales and Services Tax (SST) mechanism, may result in less public-funded support programmes for Malaysia’s growing elderly population. 

In a statement, the Galen Centre for Health and Social Policy argued that the nation seems to not have a long-term sustainable plan on how to fund programmes for the elderly.  

Such programmes are at risk “unless there are efforts to reverse [the reduced tax collection] by increasing rates and expanding coverage, broadening the tax base, or even increasing corporate and personal taxes, the resulting cutbacks and austerity measures in response to reduced spending levels”, the statement said. 

According to Galen Centre, 15% of Malaysian population is estimated to be classified as senior citizens (above the age of 60) by 2030. 

“Most will have reached retirement age, no longer be working and very likely have stopped paying income tax.  

"Social security safety nets, welfare systems and pension funds will be significantly stretched and overtaxed. These demands will only grow greater as the years go by,” the centre said. 

The government is expected to reinforce the SST in September, with an estimated annual tax collection of RM21 billion as opposed to around RM42 billion collected via the Goods and Services Tax that it is set to replace. 

“The resulting cutbacks and austerity measures in response to reduced spending levels, may result in the elderly population being vulnerable to fewer government programmes or social support infrastructure being [aided] through public funds,” the Galen Centre added. 

The move might result in the reinforcing of stereotypes and existing prejudices, whereby the younger generation see senior citizens as more of a burden to society, rather than a contributing member. 

Malaysia is already deemed as a country “ill-prepared to deal with aging population”, the statement added. 

This is further weighed by factors such as decreasing death rates, stagnant birth and fertility rates, escalating healthcare costs, a shrinking productive workforce and infrastructure that favours the young.  

“[These] make meeting the financial and social service burdens of the growing number of senior citizens, a daunting task. 

“Combined with the possibility of reduced or even withdrawal of funding for long-term care and support, it represents a demographic crisis in the making,”the centre said. 

It underlined suggestions to improve elderly care in the country, such as improving on existing financing and insurance systems for long-term care, as well as harnessing development in medicine and healthcare services to help senior citizens stay active and healthy. 

The centre also called for the improvement of elderly care accessibility and affordability via changing of community services’ organisations. It called for the challenging of prejudices and stereotypes faced by the aged population.