Dr Mahathir previously equated a welfare state to communism. — file pic
The ruling Barisan Nasional (BN) coalition lynchpin, Umno, and its political foe, PAS, have been fighting to claim ownership over the welfare state philosophy as the public grows more restive over the soaring prices of daily goods and services following subsidy cuts ahead of a general election expected by next year.
Both Prime Minister Datuk Seri Najib Razak and his deputy, Tan Sri Muhyiddin Yassin, have said that PAS’s welfare state was not new and that BN has already been practising it in government.
“To a certain extent it is true. A lot of things are made cheap for the people, the government used money in order to reduce the cost of living in this country. The cost of living in this country is very low,” Dr Mahathir told reporters when asked if he agreed with the Najib administration’s stand.
The country’s fourth prime minister, from 1981 to 2003, explained the amount of things a shopper could buy in Malaysia was nearly on par with his counterpart in the US, despite the American dollar’s higher currency value.
“If compared, RM1 in this country will buy practically US$1 (RM3.04) in America because the cost of living here is almost one-third the cost in America.
“This due to the government giving subsidies, having built up facilities, all kinds of things the government has done for the people, not for the government,” said Dr Mahathir, who had pegged the ringgit to the US dollar in an attempt to keep the national economy afloat during the Asian economic crisis in the late 1990s.
Asked if that move qualified Malaysia to be called a welfare state, the 85-year-old who once controlled the country’s purse strings clarified he did not claim it was a “full welfare state”.
“I believe that if we have a full welfare state, we’ll go bankrupt,” he said and pointed to Greece, which had announced bankruptcy due to overwhelming debt last year.
Dr Mahathir said the Mediterranean nation became broke because “they spent money giving their people, they don’t have to work, you go and retire at 40 years old, you get pension, you do that, you go bankrupt.”
He said the government should continue its welfare programmes to a limited extent.
“To be a welfare state, people must make money and pay tax to government. If people are not making money then the government will not have money,” he said.
The former finance minister highlighted that the biggest problem with having a welfare state was that the funds depended on the number of people who had jobs.
“But at the same time, because the number of people employed is less, the number of people requiring aid or pension is more.
“So when you have less money, that’s when you have to pay more money, that’s the problem of a welfare state,” he explained.
In his New Year’s message on January 1, 1994, Dr Mahathir argued against the idea.
He said people could not hope for the government to provide all the facilities as promised by a welfare state.
He also equated a welfare state with communism while railing against a minimum wage, which he argued was inefficient.
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