Amidst a deadly surge of COVID-19 cases and the attendant exhaustion of frontline health workers, two grassroots campaigns under the names Code Black and Hartal Doktor Kontrak are demanding fairer treatment – including job security – for government contract doctors.
The seriousness of the issue is underscored by its escalation: campaigners have called for a national strike on 26 July 2021 while individual campaign supporters have been called in by the police for questioning. Meanwhile, the government has responded with what appears to be a temporary solution to address some of the campaigns’ demands.
These campaigns powerfully illustrate a critical problem we are currently researching, which arise when employment categories do not reflect the nature of the job commitment and are also not matched up to fair working terms. In this primer, we unpack the problem from the government contract worker perspective.
The Growth of Contract Doctors
At the time of writing, the Malaysian Ministry of Health (MOH) employs nearly 270,000 permanent public service workers, of which 150,000 to 160,000 are healthcare workers. The number of permanent employees at MOH has remained relatively stable as shown in Figure 1 below, decreasing marginally from 268,712 people in 2016 to 267,733 people in 2021. However, MOH’s expenditure on emoluments rose in that time period, from RM13.45 billion to RM17.08 billion.
Much of that is contributed by emoluments to contract workers. As per Figure 1 below, the upward trend in MOH’s contract worker emoluments, from RM78.83 million in 2016 (or 1% of total MOH emoluments) to RM1.90 billion in 2021 (11% of total MOH emoluments), point to the rising number of contract workers within the ministry. According to a past report, MOH has the highest expenditure on contract workers compared to other government ministries.
Figure 1: Breakdown of MOH Worker Emoluments vs. Number of MOH Permanent Workers, 2016 to 2021
Since the implementation of the contract system for healthcare workers in late 2016, the number of contract doctors has grown more than nine times, from 2,544 doctors to about 23,000 people in 2021. This is partially due to the glut in number of medical graduates, partially to rules governing medical graduate placement, and partially to constraints in the government’s budget for permanent workers (more on that later).
The oversupply of medical graduates has caused overcrowding of doctor trainees at public hospitals, but the regulation on their medical placements is also a contributing factor. According to the Medical Act 1971 (Amendment 2012), the government has to provide industrial training placements for all medical graduates intending to practise medicine in Malaysia before they can be fully registered as licensed practitioners.
Medical graduates can be placed either as contract junior doctors or, more unlikely, as permanent junior doctors. Contract junior doctors are offered a five-year contract divided into three years of housemanship and two years as a junior medical officer, whereas permanent junior doctors become permanent public service workers. Upon completing the five-year term, most contract doctors have to seek new job opportunities elsewhere whereas permanent doctors may choose to continue their employment with the government or leave for the private sector.
The government has the option to convert contract doctors to permanent government doctors if a position becomes available in the public healthcare system. However, there are severe budgetary limitations on the number of doctors, or other occupations for that matter, that the government may take on as permanent staff. For example, to fulfil the demands of the Code Black and Hartal Doktor Kontrak campaigns to become permanent doctors, the government has estimated that it will cost an additional RM2 billion (we infer annually), which is around 12% of MOH’s annual emoluments expenditure today. As permanent public service workers are also eligible to receive a lifetime pension, even this number may be an underestimate.
As of the time of writing, only 3.41% of all contract doctors have landed a permanent position at MOH. More than two-thirds of those who began their service in 2016 have completed their five-year contract and have yet to secure a permanent placement elsewhere. The MOH currently offers its contract doctors a one-off one-year contract extension to meet the demands for healthcare workers during the pandemic. More recently, in response to the Code Black and Hartal Doktor Kontrak, the government has promised a maximum of four years’ contract extension and paid study leave for all contract medical officers and other contract healthcare professionals.
Issue 1: Creation Of A New Problem To Avoid An Old Difficult Problem
Taking on workers on a contract basis has become increasingly important in government recruitment as a way to cope with rising expenditure. Hiring full-time employees into the public service is extremely costly, in terms of emoluments but particularly in terms of pensions.
Over the last decade, the government has kept about the same number of permanent public service workers (Figure 2) while the number of pensioners increased from 617,637 people in 2011 to 834,484 people in 2019. And yet the share of public spending on emolument, pension and gratuities of the total budget has surged from 27% of total expenditure in 2011 to 36% in 2021. As per Figure 2 below, between 2011 and 2021 federal government spending on emoluments has increased from RM45.56 billion to RM84.53 billion while pensions have jumped from RM12.26 billion to RM27.53 billion.
Figure 2: Federal Government Spending on Emoluments and Pensions vs. Number of Permanent Public Service Workers, 2011 to 2021
Recruiting workers under contract has provided some breathing space for the government (and taxpayers) in terms of budget control, particularly in avoiding a hefty pension bill down the line. However, there is no indication whether this is a stop-gap measure or essentially a permanent solution to government hiring. If it is the latter, then it will become a significant problem and the current campaigns by the contract junior doctors will just be the beginning of more to come.
Instead of recruiting full-time permanent employees, the government could continue to hire contract workers whose employment terms can be extended repeatedly if needed. In many cases, junior doctors being one of them, this creates a double standard between two classes of workers who essentially perform the same function and who have the same job demands. The existence of two worker classes which are so closely comparable is unsustainable, and will be continuously tested by demands for fairness and parity until the difference in employment terms and entitlements between permanent employees and contract workers is meaningfully addressed.
Issue 2: Employment Category Does Not Reflect Work Commitment
The term ‘contract’ indicates a level of job flexibility and worker independence compared to permanent full-time employees. Flexibility and independence can be the case for experienced medical consultants, but not really for fresh house officers or junior medical officers. The employment demands on contract and permanent doctors who are performing their five-year industrial training placement is practically identical.
Despite having similar job scopes and level of job autonomy as permanent doctors of the same tenure, contract doctors have a lower salary and a lower set of benefits. Figure 3 below shows the difference in salaries and benefits between contract doctors and permanent doctors.
Figure 3: Difference in Salaries and Benefits between Contract Doctors and Permanent Doctors
Since contract doctors have the same responsibilities and workloads as permanent doctors, they appear to be misclassified and their employment status does not reflect their job nature and level of autonomy at work. Going by the principles of the Fair Work Act mentioned in our past article, they should be qualified for the same pay and same benefits as permanent doctors. Admittedly though, changing the employment status of contract doctors is a difficult decision due to the hefty costs of permanent public sector workers’ entitlements or compensation, as mentioned earlier.
Path to resolution complex and politically difficult, but needed
Addressing the issue of government contract workers requires a major change in policy, not only in defining what ‘contract worker’ means but also in rationalising the entitlements or compensation of permanent public sector employees.
It is estimated that the spending for emolument, pension and gratuities could take up to 60% of total government revenue by 2026 if nothing changes. At some point, the government of the day will need to take the extremely difficult decision of pruning the pension entitlements for new permanent public sector employees and replacing it with a defined contribution retirement plan. This is already being done for full-time employees of statutory agencies; the coverage will need to be extended to all levels and government entities in order to rein in costs. The notion of ‘lifetime’ job guarantee for public service workers would also have to change.
Update: Maybe the above is not as politically difficult as we believed. On 27 July 2021, the Health Director-General Tan Sri Dr Noor Hisham Abdullah announced a special task force led by the Malaysian Medical Association and the Health Ministry to study amending the Pension Act towards converting pensions to EPF contributions. If successful, this would make the prospect of offering permanent positions to contract doctors much more affordable to government coffers.
At the same time, the employment classification for government contract workers also needs to be redefined and updated. Employment classifications should reflect the nature of the job and the level of worker autonomy, which we have written about as part of our exploration of fair work principles. An ‘independent contract worker’ should have significantly higher levels of job autonomy and flexibility than a full-time employee. If the government intends to maintain hiring via contracts (while streamlining permanent workers’ entitlements), then the government should at least reclassify contract workers without much working hour flexibility or job autonomy to be ‘dependent contractors, qualifying for commensurate pay and other benefits.
It must be said however that the measures above would still not be able to answer contract junior doctors’ demands for a permanent government job when there is a major differential between the supply of medical graduates and the number of available positions in the public sector. Greater coordination and transparency between the government and medical schools could help to manage the gap between supply and demand. Allowing placements in private hospitals could also alleviate the burden on the government in providing training opportunities
The Atlanta shooting that killed six Asian women earlier this year took place on the back of rising anti-Asian online content in the US. Hateful slurs blaming Asians for the outbreak of COVID-19, along with degrading caricatures and memes of the community, had reportedly surged in far-right social media forums in the months leading up to the attack.
Online hate speech or hateful content has become a major concern in societies around the world. There is a growing trend where audiences convene around such content in online spaces, and develop or strengthen biases against other groups. The risks of online hate speech leading to violence has been well researched, but there are also broader risks to inter-group trust and cohesion.
Elsewhere, some progress.
There is now more attention than ever among governments and civil societies on finding ways to counter hate speech. At the time of writing, UK Prime Minister Boris Johnson had just issued a warning to social media giants to remove racial abuse from their platforms or face steep fines.
Driven by dramatic events, hate speech detection and removal became an urgent issue for social media companies relatively recently, with more companies implementing changes to relevant policies and targeted actions. Facebook and Twitter, for example, updated policies to describe the varying severities of hate speech disallowed on their respective platforms. These companies, alongside Snapchat, have also imposed sanctions against Donald Trump for his role in inciting the Capitol Hill riot.
We laud these developments. For Malaysia, we have also argued for an effective response to hateful content, backed by a localised understanding of what constitutes hate speech in our society’s context. Following a pioneering study which we published last year, we also proposed a cohesive framework for defining, categorising and responding to the range of hate speech intensity in the country.
But how do we define, categorise and respond to something that we do not gather? Efforts to manage online hateful content of varying seriousness needs to start with consistent detection of its trends on social media, which can then feed into further work on determining its seriousness, impact and appropriate response.
From humans to machines… gradually
Detecting online hate speech is usually a labour-intensive endeavour, relying on human moderators – whether volunteers or paid workers – to process and filter large volumes of online content. There are obvious issues with this, not least the sheer volume of new online content generated on a daily basis. Relying on human moderators also requires investment in a sufficiently diverse team of humans with local knowledge, which not many companies or regulators would be willing to do. Moreover, as their job involves reviewing unsavoury content, moderation can be a distressing experience for human moderators.
To overcome those issues, and with COVID-19 sweeping across the world*, social media platforms have been looking into increasing automation in moderation processes. Last year, Facebook and YouTube moved towards prioritising AI over human moderation, but there are some challenges to iron out.
*Human moderators, whose work is normally carried out within company facilities due to the sensitive nature of the content that they monitor, were sent home as a result of the pandemic, forcing the tech giants to rely instead on algorithms.
The AI models are, as yet, far from perfect. In a study by the University of Oxford and the Alan Turing Institute published last month, some systems were found to be overly lenient (failing to detect variations of hate speech), while others were overly tough (detecting non-hateful posts mentioning hateful words).
These issues stem from the different ways an AI model is trained to detect hateful content. One approach is by training a machine learning model with given keywords and/or simple templates of expressions before applying it to online content. Some systems that were trained with only keywords would inevitably disregard the intricacies of language. Many expressions may not be inherently offensive, but can be so in the right context and phrasing. And of course, the keywords and templates put together in the training set for the AI are also limited by the diversity of the humans behind its design.
Current AI-driven detection, therefore, still comes with problems and there will still be a role for human moderators. It is crucial to work on improving AI models though since relying on human moderation on its own will not be effective, efficient or even humane. Continued improvement of automated online hate speech detection will require not only better technology but also better design.
A Malaysia-based online hate detection initiative
For an effective partnership between AI and humans, the quality of data being fed into AI is important; when the AI is trained with local contexts, language, and dialect, it can identify or detect hate speech more accurately. Certain organisations that offer detection services for others have been doing this; PeaceTech Lab and Hatebase, for example, rely on NGOs and experts to detect what is considered potentially dangerous in local contexts though the work is prioritised on conflict zones.
There has yet to be any large-scale hate speech detection initiative in Malaysia, a country where highly racial and religious views at varying levels of hate are rife. In cases where hate speech occurs, the burden either falls on victims to escalate their concerns, or on authorities to interpret punitive legislation with overly-broad definitions of hate speech.
Building on our research last year, The Centre is working on a hate speech detection initiative in Malaysia by pairing AI with human moderators who are familiar with the local context. This initiative, a proof-of-concept hate speech tracker, will act as a repository of trends and themes for online hateful content in the country.
The tracker will become a useful resource centre for the general public and policymakers. For the public, it may serve as a means to better understand the degree and nature of intergroup tensions. For policymakers, it may be useful as a means to monitor how terms and themes that are potentially dangerous towards groups of people evolve. This could help policymakers identify more effective mechanisms to manage online hate speech and update current policy responses.
Detecting online hate speech, however, should not come at the expense of free speech. Critics of online content moderation have rightfully pointed out that efforts to manage hate speech can potentially be abused to silence dissenting views. Some hate speech monitoring organisations have tried to address this concern. Hatebase, for instance, tracks hate speech trends but at the same time is against government censorship of speech except for clear incitement to violence.
As an organisation, we also value the importance of upholding free speech in Malaysia while balancing it with the responsibilities of living in a multiracial society. To uphold this principle, content identified as hateful would need to meet a published threshold of harm or seriousness before getting flagged, a topic which we researched last year by gathering Malaysians’ perceptions on various speech samples’ intensity. We will also not be signposting or showcasing individual tweets, but only present trends and themes.
Detect, analyse, mitigate
There has yet to be a perfect tool or system that can reliably detect online hate speech in the world. Initiatives to detect online hate speech need to be complemented with continuous learning of local context to catch up with the ever-evolving social, cultural and political environment.
And yes, detecting online hate speech is only the first step. Understanding the root causes of different forms of hate in a society is also vital in managing potential inter-group conflict. With detection and better understanding, appropriate action can be taken to mitigate the impact of hate speech in various spheres of society — be it in chat groups, comment sections, or real-life conversations between people.
Daripada enam penjara di Malaysia yang dilanda wabak Covid-19 Oktober tahun lalu, empat telah didapati beroperasi dengan kapasiti berlebihan. Sehingga 3 November 2020, penjara-penjara di Malaysia dilaporkan menampung lebih dari 40% daripada kapasiti yang disyorkan, iaitu 46,420 orang. Beberapa penjara berada dalam situasi yang genting. Penjara Alor Setar, misalnya, telah dilaporkan beroperasi dengan kapasiti dua kali ganda.
Wabak COVID-19 telah mendedahkan pelbagai permasalahan jangka panjang dalam masyarakat, termasuk isu kesesakan di dalam penjara-penjara kita. Penularan virus ini di dalam penjara, yang telah digambarkan ibarat bom jangka (ticking timebombs) oleh Ahli Parlimen Permatang Pauh, Nurul Izzah, telah membawa kepada pengetahuan umum dua lagi isu yang berkaitan: penjara-penjara kita berada dalam keadaan tidak sanitari dan usang.
* Sebelum ini kami telah menulis mengenai kesan kesesakan tempat tinggal kepada pekerja asing di Malaysia, yang boleh dibaca di sini.
Untuk mengawal kluster COVID-19 di dalam penjara, Kementerian Dalam Negeri (KDN) telah mengumumkan pada 15 Disember 2020 bahawa 10,000 penghuni telah dihantar ke pusat pemulihan manakala 11,000 pendatang tanpa izin akan dihantar pulang ke negara asal tahun ini. Isu ini juga telah menarik perhatian Parlimen. Akhir tahun lepas, Kumpulan Rentas Parti Parlimen Malaysia Mengenai Reformasi Penjara Dan Tempat Tahanan Awam (KRPPM), satu usaha bersama antara Dewan Rakyat dan Dewan Negara, telah dibentuk khusus untuk menangani isu kesesakan penjara.
Kesesakan penjara ialah suatu isu yang rumit dan merangkumi pelbagai aspek. KRPPM dan KDN dijangka akan meneliti pelbagai jalan penyelesaian, termasuk peruntukan tambahan untuk membaik pulih infrastruktur penjara. Walau bagaimanapun, kita harus berwaspada jika ada kemahuan dalam kalangan penggubal dasar untuk menambah bilangan penjara sebagai solusi. Sebaliknya, cadangan kami ialah supaya pihak penggubal dasar menyelesaikan satu isu yang mendesak dan sangat relevan, iaitu hukuman keterlaluan bagi kesalahan kecil berkaitan dadah yang telah menjadi penyumbang besar kepada kesesakan penjara.
Perlukah penjara disesakkan dengan pesalah kecil?
Pakar-pakar kesihatan awam telah memberi amaran mengenai risiko yang boleh ditimbulkan oleh COVID-19 dan penjara yang sesak. Menurut Sandra Chu, Pengarah Penyelidikan Research and Advocacy at the Canadian HIV/AIDS Legal Network, pemenjaraan pesalah bagi dakwaan memiliki kuantiti dadah yang kecil akan mencetuskan bahaya dalam musim pandemik. Atas kebimbangan ini, Dainius Pūras, seorang Pelapor Khas (Special Rapporteur)Pertubuhan Bangsa-Bangsa Bersatu (PBB), telah mencadangkan tindakan sejauh penguatkuasaan moratorium pelaksanaan undang-undang yang menjenayahkan penggunaan dan pemilikan dadah bagi mengurangkan risiko penularan COVID-19.
Situasi di Malaysia, di mana wujud populasi penjara yang tinggi, menyokong kebimbangan di atas. Populasi pesalah dadah yang ramai di penjara juga bukanlah suatu perkara yang baharu dan memeranjatkan. Hal ini disebabkan oleh undang-undang dadah yang keras di Malaysia. Dianggarkan dua pertiga tahanan di penjara Malaysia adalah mereka yang disabitkan atas kesalahan berkaitan dadah.
Pada masa ini, pesalah dadah yang dipenjarakan merangkumi pelbagai kumpulan, dari pengedar, hingga individu yang disabitkan kerana memiliki dadah, hingga mereka yang kebetulan didapati positif dadah dalam ujian air kencing. Pakar psikiatri Dr Sivakumar Thurairajasingam apabila di temubual oleh CodeBlue menyatakan bahawa pegawai perubatan awam akan dengan segera menganggap suspek pengguna dadah sebagai seseorang yang ‘bergantung’ kepada dadah jika keputusan ujiannya positif, walaupun itu adalah kali pertama suspek tersebut mencuba bahan narkotik. Hal ini menunjukkan bahawa pada masa ini ianya agak mudah untuk seseorang disabitkan kesalahan berkaitan dadah. Kesalahan memiliki dadah tidak tegar seperti ganja dalam kuantiti yang kecil juga boleh menyebabkan seseorang dihantar ke penjara.
Hukuman untuk kesalahan kecil berkaitan dadah di Malaysia Pemilikan dadah: Di bawah Akta Dadah Berbahaya, seseorang yang didapati memiliki kuantiti dadah di bawah 5-gram biji popi atau ganja boleh dikenakan hukuman penjara hingga 5 tahun atau denda maksimum RM20,000, atau kedua-duanya sekali.
Penggunaan dadah: Terdapat dua undang-undang pada masa ini memperuntukkan hukuman bagi penggunaan dadah, iaitu Akta Dadah Berbahaya dan Akta Penagih Dadah (Rawatan dan Pemulihan). Di bawah Akta Dadah Berbahaya, pengguna dadah dikenakan denda maksimum RM5,000 dan hukuman penjara hingga dua tahun, sementara di bawah Akta Penagih Dadah (Rawatan dan Pemulihan), pengguna dadah dikenakan pemulihan wajib serta pengawasan untuk empat tahun.
Menurut Seksyen 38 (B) Akta Dadah Berbahaya, pengguna dadah terlebih dahulu harus menjalani hukuman di bawah Seksyen 15 akta yang sama, sebelum menjalani pengawasan di bawah Akta Penagih Dadah (Rawatan dan Pemulihan).
Penularan wabak COVID-19 di penjara nampaknya telah mendesak pihak berkuasa mengambil tindakan untuk membetulkan masalah pemenjaraan berlebihan pesalah dadah di Malaysia. Jabatan Penjara telah menyusun langkah-langkah mitigasi termasuk memindahkan 2,800 pesalah kecil berkaitan dadah ke fasiliti sementara, dan telah memohon supaya yang lain ditempatkan di perimeter penjara agar mereka dapat dipulihkan, atau direhabilitasi.
Langkah-langkah ini jelas adalah solusi yang sementara. Selain daripada pemindahan tahanan ke kemudahan sementara secara ad hoc, apa yang diperlukan adalah kaedah untuk menangani kesesakan penjara yang lebih tersusun. Penyelesaian yang lebih mantap dan berteraskan objektif jangka panjang adalah diperlukan untuk pesalah jenayah kecil, terutamanya yang berkaitan dadah. Harus diingatkan di sini bahawa kira-kira dua pertiga dari populasi penjara di Malaysia sekarang terdiri dari pesalah dadah. Untuk ilustrasi, jika kita menganggap hanya separuh daripada jumlah itu terdiri daripada pesalah kecil berkaitan dadah (jumlahnya mungkin lebih tinggi; pada tahun 2017, 56% banduan dilaporkan dipenjara kerana kesalahan ini), dengan hanya menyingkirkan bahagian tersebut kita boleh mengurangkan kepadatan penghuni di empat buah penjara yang telah menjadi kluster penularan wabak COVID-19 seperti yang digambarkan dibawah:
Sumber: Jawapan Parlimen oleh Menteri Dalam Negeri pada 17 Jun 2019; Kenyataan Media oleh Ketua Pengarah Penjara Malaysia pada 6 Oktober 2020. Pengiraan mudah oleh The Centre. Populasi Penjara di Malaysia sehingga Jun 2019.
Perjalanan yang panjang ke arah sistem pemulihan
Rasional dan keberkesanan undang-undang dadah Malaysia telah mula dipersoalkan, terutamanya untuk kesalahan kecil. Sebelum pandemik COVID-19 melanda setiap pelusuk dunia, telah pun wujud permintaan untuk mengkaji undang-undang dadah Malaysia dan mengambil pendekatan berasaskan rawatan dan rehabilitasi terhadap penagihan dadah. Tokoh-tokoh terkenal, termasuk pakar penyakit berjangkit Prof Dato’ Dr Adeeba Kamarulzaman, Ketua Program Pemulihan Ketagihan Dadah Spiritual (SEDAR) Dr Rusdi bin Abdul Rashid, dan Pengarah Pusat Penyelidikan Dadah Universiti Sains Malaysia (USM) Prof Dr Vicknasingam Kasinather telah lama menyokong langkah untuk merawat secara perubatan dan merehabilitasi pengguna dadah di Malaysia.
Sementara itu, usaha ke arah reformasi dasar dan undang-undang berkaitan dadah telah mengambil masa yang panjang. Pada tahun 2017, Menteri di Jabatan Perdana Menteri ketika itu, YB Datuk Seri Azalina Othman telah mencadangkan buat pertama kali supaya satu kajian dijalankan untuk menilai semula hukuman-hukuman dadah berdasarkan tahap keseriusan pemilikan dan pengedaran. Pada tahun 2019, sebuah jawatankuasa khas yang terdiri daripada Kementerian Kesihatan (KKM), Kementerian Belia dan Sukan (KBS) serta Agensi Anti Dadah Kebangsaan (AADK) telah ditubuhkan dan dilaporkan telah bersetuju untuk mengusahakan langkah-langkah ke arah meringankan hukuman jenayah terhadap pesalah kecil dadah.
Baru-baru ini, kerajaan Perikatan Nasional dikatakan telah mencadangkan undang-undang baru untuk menggantikan Akta Penagih Dadah (Rawatan dan Pemulihan) menjelang akhir tahun ini. Undang-undang baharu ini dirancang untuk memperuntukkan penempatan pengguna dadah dalam program rehabilitasi dan rawatan tanpa pemenjaraan. Walau bagaimanapun, penggunaan dadah masih ditadbir di bawah bidang kuasa Akta Dadah Berbahaya dan sehingga peruntukan yang relevan di bawah Akta ini dipinda, keberkesanan undang-undang baharu ini akan menjadi tanda tanya.
Tambahan pula dan perkara yang paling utama, isu kesalahan pemilikan dadah dalam kuantiti kecil masih belum selesai. Hukuman yang tidak seimbang dan penjara yang sesak mungkin akan terus berkekalan sehingga hal ini dapat diselesaikan.
Dekriminalisasi Dadah merujuk kepada penghapusan tuduhan dan hukuman jenayah seperti hukuman penjara kerana memiliki dan/atau menggunakan bahan narkotik dalam jumlah yang kecil.
Konsep ini telah mendapat sokongan yang kuat dan juga kritikan. Aktivis seperti Malaysian Drug Policy Reform Alliance menyokongnya dan telah memetik kajian tempatan yang menunjukkan perbandingan kos dan keberkesanan penjara berbanding pemulihan dadah. Pihak lain pula, seperti mantan Ketua Polis Negara Tan Sri Dato’ Musa Hassan dan peguam jenayah, Datuk Rosal Azimin Ahmad berpendapat bahawa langkah ini akan mendorong penggunaan dadah dan membebankan penguatkuasa undang-undang.
Adakah COVID-19 akan mengubah pendekatan kita?
Pandemik ini telah menjadi peringatan kepada kita tentang satu isu yang telah lama berlegar tetapi selalu dilupakan. Reformasi undang-undang dadah amat diperlukan, bukan hanya kerana kesesakan di penjara, tetapi juga atas sebab yang lebih mudah: keberkesanan undang-undang tersebut. Antara lain, dasar-dasar berkaitan dadah yang progresif terbukti telah dapat meringankan beban sistem keadilan jenayah dan mengurangkan penggunaan dadah. Sebagai contoh, di negara Portugal, setelah pelaksanaan dekriminalisasi dadah pada tahun 2001, kes-kes overdos dadah, jangkitan HIV, dan jenayah yang berkaitan dengan dadah telah dilaporkan menurun. Manfaat serupa juga dilihat di Switzerland; hampir tiga dekad setelah dekriminalisasi dadah, negara tersebut mencatatkan penurunan pengguna heroin baharu sebanyak 80%.
Sejumlah sistem perundangan lain di serata dunia juga telah mula bergerak ke arah penggubalan dasar dadah yang lebih progresif. Contohnya, dekriminalisasi ke atas semua jenis dadah telah dilaksanakan di negeri Oregon di Amerika Syarikat pada akhir tahun lalu. Australia telah memperkenalkan draf rang undang-undang pada Disember tahun lalu untuk menghapuskan hukuman ke atas pemilikan dadah untuk penggunaan peribadi. Pihak yang menyokong telah menyambut baik rang undang-undang tersebut dan menyatakan bahawa pengguna dadah akan mendapat akses kepada penjagaan kesihatan yang lebih baik sambil mengurangkan tekanan pada sistem keadilan jenayah di Australia.
Ketika Malaysia memerangi penularan wabak COVID-19, amatlah penting untuk kita merancang secara lebih konkrit untuk meminda undang-undang dadah yang bersifat punitif ke arah satu pendekatan yang yang mengutamakan rehabilitasi. Sistem rehabilitasi tidak hanya akan dapat meringankan jumlah pesalah dadah yang tinggi di penjara, tetapi juga akan melahirkan kaedah yang lebih berkesan untuk menangani isu kebergantungan dadah di negara kita.
Since 2005, many Malaysian companies do not directly hire migrant workers. Instead, migrant workers are employed by recruitment agencies, which in turn outsource them to the companies.
This outsourcing practice was institutionalised through a 2012 amendment of the Employment Act 1955. Under this system, work permits are attached to the recruitment agents, or “contractors for labour”, instead of the companies which the migrant workers are outsourced to. Companies prefer this arrangement as workers who are not direct employees would not be subject to collective bargaining agreements and can be hired for specific periods of time and be sent back to the recruitment agencies once their services are no longer needed. The system has also distanced the companies from any liability towards the workers.
Critics have highlighted how the system has brought back labour practices that are reminiscent of those from the British colonial era, which deprived workers of their basic rights. Many of the workers have found themselves in debt bondage from having paid high recruitment fees to the agencies. They have also been subjected to numerous forms of mistreatments, including the withholding of passports by employers, and exposure to poor working conditions.
Who and what is involved in the recruitment process?
To hire foreign workers, the company first needs to obtain a letter from the Ministry of Human Resources’ (MOHR) Jabatan Tenaga Kerja Semenanjung Malaysia (JTKSM) confirming that they are not able to hire Malaysian workers.*
Part of the process involves putting up a job posting on the JobsMalaysia online portal (replaced by MYFutureJobs on 1 November 2020) to advertise available vacancies to local workers. For several years there was no fixed time period for advertising on JobsMalaysia in order to determine that no Malaysians can fill the vacancies. Companies treated the requirement as a formality and would proceed to apply for foreign workers via MOHR’s Sistem Permohonan Pekerja Asing (or ePPAx) right after posting the vacancies on JobsMalaysia. In June 2020, however, a 30-day mandatory posting period was added through a cabinet decision.
* The approver for Sabah is the Sabah State Labour Department and the Committee for Foreign Workers in Sabah and Labuan, and for Sarawak is the Sarawak State Labour Department.
With the letter from JTKSM, the company can apply for a foreign worker quota from MOHR. The Ministry will approve the application if the company meets the relevant criteria.
This quota is a company-specific quota for a certain position that was posted on JobsMalaysia which Malaysians could not fill. The job posting allows the company to apply for a certain number of foreign workers for the position. This is the first among two quotas that the company needs to apply for, the second being the one issued by the Ministry of Home Affairs (MOHA). The quotas can also be applied for through a recruitment agency, who may act on behalf of the company throughout the recruitment process.
Once the company has obtained the approval from MOHR, it can apply to MOHA for the Ministry’s foreign worker quota. This is typically an online process via the Foreign Workers Centralized Management System (FWCMS). Once the quota is approved, the company needs to pay the workers’ levy*, the relevant insurance policies, and a security bond.
Quota allocation is determined by MOHA based on a list of approved “source countries” and specific industries in which workers from those countries are allowed to work. Quotas are determined by arbitrary guesstimates based on different industry guidelines. For example, for the plantation sector, guidelines from the Ministry of Plantation Industries and Commodities may indicate 1 foreign worker for every 8 hectares of palm oil plantation, while for the construction sector, guidelines from the Construction Industry Development Board indicate 1 foreign worker for every 3 Malaysians. Meanwhile, in the services sector, 5-star hotels are allowed to hire 1 foreign worker per 12 rooms, while 1-star hotels can hire 1 foreign worker per 30 rooms.
* Introduced in 1992 with multiple increases since, levies were originally imposed on migrant workers in order to cover their use of public services and infrastructures. The levies yielded approximately RM1.75bn to RM2.75bn to the government annually between 2005 to 2014.
Once the relevant quotas have been approved, the company can begin recruiting. However, this is not an easy process. For companies that require the services of a large number of workers, it is logistically challenging and uneconomical for them to internalise the recruitment process. They will instead enter into a contractual agreement with the recruitment outsourcing agency, which will not only help find the migrant worker candidates from the source country, but which will also become the workers’ direct employers.
To find the worker candidates, the outsourcing agencies typically engage the services of agents that are based in the targeted countries. Upon receiving a request from the destination country, the agents, however, may find it difficult to locate prospective migrants from remote areas and villages; they also charge an upfront recruitment fee and will need to find people who would be willing to pay the fee in order to get hired. To facilitate the process, the agents rely on informal sub-agents to act as intermediaries between them and the prospective workers.
The informal sub-agents assist in the process by vouching for the recruiters and convincing the prospective migrants to migrate. They also assist in the paperwork, passport application, bank account opening, medical check-up, and transportation to the airport for the would-be migrant workers. In some cases they even act as guarantors for the workers who require credit. Many intermediaries are in fact returnee migrants or relatives of prospective migrants who are familiar with the procedures and challenges of migration. This stage of the recruitment process can prove to be costly for the worker, as we will discuss further below.
Once the services of the workers are secured, the outsourcing agency applies for a Visa With Reference (VDR) at the Malaysian Embassy in the source country so the workers can travel to Malaysia. Upon arrival in Malaysia, the workers have 30 days to undergo a medical checkup by the Foreign Workers’ Medical Examination Monitoring Agency (FOMEMA) Sdn Bhd.
The medical checkup is usually arranged by the employer. Once the workers have obtained the medical clearance, the employer can then apply for an employment pass called the Visitor Pass (Temporary Employment), or VP(TE). After receiving the VP(TE) the workers can begin their employment in Malaysia.
Despite this being the formal process, employers can also bypass it through Special Approvals (Kelulusan Khas) from the Ministry of Home Affairs through ministerial approval and ‘intermediaries’. Between 2016 and 2018, a quota totalling 512,315 was approved by MOHA or through special committees, instead of going through JobsMalaysia, which approved 416,510 foreign workers over the same period. Through Special Approvals, 22,901 foreign workers were allowed to work in Malaysian-only sectors and of the 7,784 employers granted Special Approvals, only 1,036 advertised the jobs on JobsMalaysia.
The employer is also legally liable if the migrant workers abscond and become illegal. Abscondment is reported as the second largest challenge that employers face in dealing with migrant workers, after communication problems. In the event of abscondment, in order to cancel the VP(TE), the employer will need to submit documentation to the Malaysian Immigration Department which includes the foreign workers’ passports.
In order to mitigate the risk of abscondment, the passports (and the VP(TE) inside) are often held by the recruitment agency or company, even if the government has made it clear that this an offence under the Passport Act 1966. There have also been reports of employers attempting to compromise by storing passports on premise with the workers keeping the key, in response to pressures from multinational companies.
The status of recruitment agencies through the years
The legality of recruitment agencies in Malaysia has been subject to numerous policy U-turns. They were first legalised in 1981 through the Private Employment Agencies Act. Due to exploitation, indenture, corruption and fraud, they were subsequently banned in 1995 and were replaced by a Special Task Force on Foreign Labour under the Ministry of Home Affairs as the sole agency responsible for foreign labour recruitment. This signalled a shift to the implementation of a Government to Government (G2G) model*, which centralised foreign worker recruitment in Malaysia.
Recruitment agencies were re-legalised in 2005 through an amendment to the Private Employment Agencies Act, as lawmakers found that the ban did not solve the problem as foreign workers and employers continued to use the agencies. Moreover, the ban also made it difficult to control unregulated private agencies. This move also enabled outsourcing to be practiced in the recruitment process. From 2010 onwards, however, the government phased out outsourcing firms and reverted to the G2G model. This policy shifted again in 2012 as a result of the amendment of the Employment Act 1955, through which the concept of “contractor for labour” was invented.
During its tenure, the Pakatan Harapan government announced that outsourcing agencies would be abolished by March 2019 and companies would need to absorb the workers who they employed via the agencies. Whether or not the policy is still in place, however, is not clear. At present, due to the ongoing COVID-19 pandemic, the Perikatan Nasional government has introduced a freeze on the hiring of foreign workers.
* G2G agreements and MOUs between Malaysia and the source country are usually signed in order to cut out the exorbitant fees charged by recruitment agents from the hiring process.
The cost of working abroad for a migrant worker in Malaysia
For a migrant worker to come and work in Malaysia, a hefty amount needs to be paid. Recruitment agencies and sub-agents may charge each worker an upfront recruitment fee that can be multiples of the actual cost of the expenses it is meant to cover. A large proportion of the workers end up having to sell land or property or take on debt to finance the migration at usurious rates.
Alternatively, recruitment agencies may bear the cost of recruitment, but often recoup the outlay through salary deductions once the workers have been outsourced to other companies. These fees are only meant to be paid once; however, researchers have found that some agents in the source countries double-dip, claiming the same expenses from both the worker and the employer in Malaysia.
Many migrant workers become indentured as a result of this. If a worker comes to Malaysia to work for an average salary of RM1,000 a month, the indenture would be worth 20 months wages in the case of a Bangladeshi, 5-6 months for a Nepali, and 2-3 months for an Indonesian. For Nepalis and Indonesians, there is some semblance of financial viability with extreme scrimping. However, the reality is that Indonesian maids have reported needing to pay 6-10 months of their wages to recruitment agencies. For Bangladeshis, the payback is gravely uncertain because the VP(TE) is only issued for 12 months with a possibility of additional 12-month extensions for up to 10 years, which are not guaranteed. Taking into account living costs, interest on the loan, potential employer salary deductions and a reasonable profit, there is a built-in assumption that Bangladeshi migrant workers will need to work in Malaysia continuously for several years, whether legally or otherwise, before seeing any semblance of a financial return.
Rapid digital transformation has changed the power relationship between employers* and workers, creating new employment categories in its wake and eroding the relevance of current labour laws. Building on the Oxford Internet Institute’s Fair Work Initiative as well as global research efforts to classify today’s workers, Part 1 of our research series argued for updating Malaysia’s employment categories in order to reflect today’s inherent power relationships, and to outline what is owed to workers of each category.
*Note: The term ‘employer’ is used broadly throughout this piece, representing the party that either employs the worker or is the intermediary for the supply of jobs.
In this Part 2 of the research series, we focus on a major pillar of Fair Work as per the Oxford Internet Institute, namely fair pay. What does fair pay mean in the context of a law describing Fair Work in Malaysia? And how would it apply to the different power relationships between employers and workers that we see today?
Economic fairness vs. moral fairness?
In 1965, shortly before the United States government adopted the first federal definition of the poverty line, one of its policy drafters Mollie Orshansky wrote: “There is not, and indeed in a rapidly changing pluralistic society there cannot be, one standard universally accepted and uniformly applicable by which it can be decided who is poor. … If it is not possible to state unequivocally ‘how much is enough,’ it should be possible to assert with confidence how much, on an average, is too little.”
The term ‘fair pay’ usually suggests an equitable level of compensation for a specific job. Going by this framing, the basis of fair pay becomes founded on the idea of that job’s value contribution to a good or service. This primarily economic idea of fairness leads to policies emphasising the linkage of wages to productivity, which assumes that low wages can be increased or avoided if the job’s productivity is calculated and if the job is made more value-adding.
While the concept of productivity-linked wages appears principled, in reality, it is tested by the challenge of measurement. An assembly line worker’s output can be measured by units assembled per hour but how much is the productivity and value contribution of a cleaner and what is the commensurate level of compensation for that job? What about for a security guard?
The question of fair pay by occupation, sector, paper qualification or productivity calculation has its place in policy discussions and in union negotiations, but we argue that it is not the core problem in question for this piece.
Instead, the idea of fair pay in the context of fair work legislation is primarily one of moral judgement. Going back to Mollie Orshansky above, it is about asserting with confidence how much is too little, i.e. how much is a societally acceptable level of compensation for working a customary number of hours a month, regardless of the job performed? How much is the amount, where coming below the said figure would be considered humanly exploitative and warranting of legal penalties? Going by this framing of the issue, the basis of fair pay becomes founded on the idea of a minimum living wage and non-wage benefits – i.e. how much is the minimum needed to live on.
As will be argued, the gap between this idea and what is currently practised underpins the need for a revised conception and administration of fair pay in Malaysia.
Of formulas and consultations
Historically, governments have established a minimum income floor by enacting minimum wage laws. Along with the statutory wage laws, each country has a regulatory infrastructure or process by which to revise the minimum wage periodically. Figure 1 below shows a brief cross-country comparison of minimum wage regimes.
Figure 1: Selected Cross-Country Comparison of Minimum Wage Regime
Sources: Malaysia – Minimum Wages Order 2020; National Wages Consultative Act 2011 China – Employment Law Overview China 2019 – 2020 by L&E Global United Kingdom – UK’s National Minimum Wage Act 1998 Australia – Australia’s Fair Work Act 2009
As stated in Figure 1, countries’ minimum wage regimes differ in several key respects such as coverage. The minimum wage may not cover all workers and can exclude or be silent on coverage for informal or self-employed workers. Many governments set minimum wages federally or nationally, though countries like China favour local government setting of minimum wages. In many countries, final authority to decide on the minimum wage resides within the responsible ministry or government department, whereas some like Australia have established a commission by law to set the minimum wage. Revisions to the minimum wage level appear based on a combination of formula, research and stakeholder consultation, though the level of transparency on each of these varies from country to country.
In Malaysia, the advent of the minimum wage is a fairly recent phenomenon – the first minimum wage was enforced in 2012. Before that, wage levels were regulated by the Industrial Relations Act 1967 and the Wages Councils Act 1947, where wage rates were determined through collective bargaining for unionised workers and work councils for non-unionised workers.
When a key 2009 study found that over one-third of private sector workers earned less than the national poverty line, the government resolved to set up the National Wages Consultative Council (NWCC) via the National Wages Consultative Council Act 2011 to develop and advise on the national minimum wage. One year after the founding of NWCC, the government implemented the first minimum wage via the Minimum Wages Order 2012 with the announced aim of helping to eradicate poverty and ensure workers can meet the rising costs of living.
The National Wages Consultative Council (NWCC) is a tripartite working group set up to study all matters concerning minimum wages and to give recommendations to the government for making or revising the Minimum Wages Orders according to the sector, type of employment and regional area.
According to the NWCC Act 2011, the council shall consist of the following members who shall be appointed by the Minister of Human Resources:
1. A Chairman 2. A Deputy Chairman 3. A Secretary 4. At least 5 public officers from the Ministry of Finance, the Public Service Department, the Ministry of International Trade and Industry and the Economic Planning Unit 5. At least 5 members representing employees 6. At least 5 members representing employers 7. At least 5 members representing independent members
The first minimum wage level was set at RM900 a month for West Malaysia and RM800 a month for East Malaysia. Any employer who fails to comply with the minimum wage law can be punished by paying the worker the sum owed as well as a potential fine of not more than RM500 per offence. Editor’s note: A low amount on the surface, in comparison to other fines in Malaysia’s statutes.
Since 2012, the government has increased the minimum wage level to RM1,200 a month for 56 cities and municipal council areas and RM1,100 a month for other areas. Despite these revisions, experts and worker unions still think the current amount is too low to live on adequately. In partial response, the former Human Resources Minister had said in 2019 that the government was considering a sectoral-based minimum wage, which is where the question of minimum wage setting still stands today, after the change in government and the onset of the COVID-19 pandemic in early 2020.
Non-wage financial benefits* in Malaysia are covered by social security acts mandating employers to protect their employees against future financial risks, the key ones being employer monetary contributions to employees’ retirement savings and unemployment insurance. Today, the Employee Provident Fund (EPF) Act 1991 requires all employers to contribute 11-12% of their employees’ base salaries for retirement savings while the Employment Insurance System (EIS) Act 2017 requires employers to contribute a set amount into a national unemployment insurance program for full-time employees. Although informal workers are not eligible for any employer contributions for EPF or EIS, they are allowed to contribute into the self-employed versions of these schemes voluntarily, and on their own initiative.
*Note: Social protection schemes relating to workplace safety and accidents like SOCSO, and reskilling like HRDF, will be discussed in our next article on ‘fair conditions’.
To date, there is no law in Malaysia mandating employers to contribute to workers’ healthcare insurance; provision of private healthcare insurance by companies is mostly due to market norms. To a large extent, the mandating of healthcare insurance by law is driven by the characteristics of a country’s healthcare system. Countries such as Singapore, Thailand and China mandate eligible employers to contribute into a national healthcare insurance scheme for every eligible worker (much like our EPF scheme) while countries like the USA mandate eligible employers to provide company-sponsored health insurance or subsidise their employees’ private health insurance premiums.
What are the current gaps?
Although Malaysia has a legal framework to govern workers’ wages and benefits, there are key gaps in definition and administration that put us some way from achieving the notion of ‘fair pay’. Given the significant role of the minimum wage laws in achieving ‘fair pay’ in Malaysia, this piece focuses on the limitations of the current wage framework and reserves discussion on non-wage compensation such as retirement contributions in future related pieces.
Vague rationale for minimum wage
Currently, Malaysia’s minimum wage levels are determined through a combination of formula application and stakeholder consultation. The NWCC’s website states that the setting of the minimum wage rates are based on factors affecting workers’ ability to make ends meet, such as the national poverty line, the median income, productivity growth, inflation and the unemployment rate. A technical committee under the NWCC conducts calculations, industry sensitivity tests and consultations with stakeholders, after which proposed options for the minimum wage are debated amongst members of the NWCC. The agreed upon minimum wage range is then proposed to the Minister of Human Resources and the Cabinet for the government’s decision.
It is unclear whether the core basis of the minimum wage is driven by the question of the minimum needed to live in today’s society, or by the question of what industry can or is prepared to bear. The NWCC website states two potentially competing aims of ensuring employees are able to meet basic needs as well as providing a conducive environment for industrial production.
The current formula suggests that Malaysia’s minimum wage setting takes into consideration the national poverty line, median income, inflation rate, unemployment rate and productivity growth. However, as mentioned above, experts and worker unions still think the current minimum wage is too low to live on adequately. The significant difference between the current minimum wage (RM1,200 for Kuala Lumpur & major cities) and estimates for the real living wage (BNM’s RM2,700 for Kuala Lumpur & major cities and SWRC’s reference budget of RM1,870 for an unmarried public transport user in Klang Valley) implies that either the formula needs improvement or that employer readiness plays a more significant role in deciding Malaysia’s national income floor.
Read our past primer on minimum wage vs. living wage.
Opaque review and decision-making process
While there are broad guidelines under the current framework, there is a lack of transparency in how the review of the minimum wage level is conducted and what factors drive decision-making. The recommendations of the NWCC, including its supporting calculations and information sources are not published for public comment or information. The deliberations on these recommendations and the rationale for the government’s final decision are also not published.
Increasingly outdated policy paradigm
As outlined in Part 1, the emerging trend of labour informalisation makes policy frameworks that revolve around formal full-time employment increasingly obsolete, including minimum wage laws. Even if the official minimum wage were to be sufficient to cover local costs of living, its enforcement would still be limited to full-time or part-time formal employees only – a declining employment category in an era of digitalisation and contract or ‘gig’ employment. To ensure that all workers who work a stipulated number of full-time or part-time hours receive the fair minimum pay, new employment categories would need to be established (such as dependent contractors) and would need to be thoughtfully integrated into current minimum wage laws.
Finally, the acute hardships caused by the COVID-19 pandemic on low-waged income earners have shown how policy frameworks that focus on employer affordability are increasingly insufficient and siloed. Minimum wage policy needs to be compatible and consistent with a national policy on social safety nets. In this past year of COVID-19 we have seen the government implement both ad hoc measures such as wage subsidies as well as more established Bantuan Sara Hidup household cash transfers (or its pandemic-times name, Bantuan Prihatin Rakyat) to supplement low or interrupted incomes. This same approach should be a cornerstone of a long-term social safety net policy post-COVID, where minimum wages and non-wage financial contributions by employers plays the role it is intended to accomplish, in tandem with wage support, household income support and reskilling schemes by the government.
A clear, viable policy for fair pay
To reiterate, the core policy question on fair pay in the context of this piece is about determining the minimum amount owed to a worker for a specified (and conventional) number of hours worked. To close the gaps in doing so, we propose the following:
A societally acceptable level for the minimum wage
What is the purpose of a national minimum wage? If it is to ensure that workers can meet a minimum reasonable cost of living – which we argue is the foremost purpose – the minimum wage should be researched, calculated and set at the level of a minimum living wage for the locality.
There will surely be debates around what is a societally acceptable definition of a minimum living wage and minimum living conditions but at the very least, Malaysians would be clear that the minimum wage, in principle and in law, is set at a level that does not come below the poverty threshold or other benchmarks of misery or exploitation. Future revisions of the minimum wage would be mostly reflective of changes in the consumption basket, inflation, and the level of local economic development.
A transparent review and decision-making process
Setting the minimum wage, even to the level of a living wage, will likely continue to be a negotiation between application of a formula as well as appeals from stakeholders. While we aspire to the level of independence in Australia’s minimum wage set-up, particularly in the autonomy of the Fair Work Commission, as a medium-term measure we advocate emulating the transparency of that same commission.
The details of the annual minimum wage review process and data sources should be made public including the formula or calculation for the minimum wage, any research papers commissioned to amend or update the formula, counter-proposals from stakeholders, proceedings from stakeholder engagement sessions, to name a few. Instead of closed-door discussions, we strongly advocate for these key information to be published and for the government to explain discrepancies between NWCC’s minimum wage proposals and the government’s final decision on the minimum wage. These pieces of information can then be constructively debated in Parliament by elected representatives (when Parliament reconvenes).
An updated policy paradigm of wages and social safety nets
With new forms of employment mushrooming in the fast-changing labour market, the eligibility criteria for earning a fair minimum wage and benefits should not only be limited to those in formal employment. As argued above, the minimum wage should apply to all worker categories, unless there are sectoral or practical obstacles barring its implementation (in which cases wage or income support kicks in).
In Part 1, we argued for the establishment of 3 major employment categories to reflect 3 major underlying power relationships: employees, dependent contractors and independent contractors. As per current laws, all formal employees who contribute full-time hours should earn a minimum living wage and have non-wage financial benefits such as employer contributions to EPF and EIS.
For dependent contractors, we propose that those who work the equivalent of full-time hours should also earn incomes not less than the minimum living wage. Independent contractors meanwhile have the highest degree of job autonomy and control; workers in this category should have sufficient means and capacity to negotiate for rates and fees above the minimum living wage but for additional information and know-how support, should also be supported by collectives supporting independent contractors and solopreneurs.
Some countries have created a tiered minimum wage system to account for younger workers, apprenticeships, hours worked and other material circumstances.
In the United Kingdom, workers younger than 23 years old and workers in apprenticeship have separate minimum wage levels. Australia adopts a different approach by offering special provisions known as modern awards in addition to the statutory wage law to set sectoral/occupation-based minimum wage and employment conditions. To accommodate flexible working hours, some state governments in the United States have enabled those working full-time hours or more in a week to earn a premium payment on top of their minimum wage.
Anticipated Issues
At the time of writing, the debate* about raising the minimum wage to the living wage level is increasing across the world in the United States, Indonesia, and more. In Malaysia, the COVID-19 pandemic has highlighted the struggles of many low-income Malaysians to make ends meet, exposing the inadequacy of our current minimum wage, both in amount and in coverage. While the government promises a review of the minimum wage, we argue that its definition, administration and policy paradigm needs to undergo a significant change.
*Note: Debate amongst economists on the effects of raising the minimum wage have come a long way from mostly negative to mixed, based on empirical evidence showing little impact to employment upon modest increases (paywall).
Implementing a local living wage as the minimum wage in one stroke will very likely not be possible or even advisable. The difference between the current minimum wage and the revised poverty line (not to mention various proposals of local living wage figures) is very large, and there will be serious and legitimate concerns regarding companies’ ability to pay, especially SMEs. Raising the minimum wage has to be done in stages. To further support the transition to a minimum living wage regime, the government may also institute sectoral exemptions to reflect the cost of living in specific working environments such as oil palm plantations, as well as targeted, temporary wage subsidies for qualifying companies with clear criteria.
Extending minimum wage coverage to all workers will also not be straightforward. One challenge is in determining numbers of hours worked for certain types of dependent contractors, for example gig platform workers. Should hours spent on the platform app be equated to hours worked or would this result in ‘gaming the system’? There is as yet no answer to this question, and many other practical nuts-and-bolts questions of implementation. But if ensuring fair pay for all workers, including informal workers, is something we consider not only societally acceptable but also societally important, we should ensure that the principle is agreed upon, and that time and effort are invested towards resolving the practical issues.
Beyond earning a living wage, what other factors constitute Fair Work? We take up fair working conditions and fair contracts in the next instalment of this research series.
In February this year, we began a study to assess the effects of the then year-long pandemic on Malaysians’ mental health. At the time, a second nation-wide lockdown had just been declared. Data for this mental health study was collected via online survey which reached nearly 1,000 respondents from across the country*.
*Respondents’ mental health was measured by their responses to the DASS-21 questionnaire. For more details on how the DASS-21 questionnaire was applied, respondent demographics and the study’s overall methodology, please refer to Part 1. Please note that this is not a nationally representative stratified sample.
A descriptive analysis of the data was published in three parts, each tackling a different aspect of the general deterioration experienced over the past year. Part 1 showed that over half of surveyed respondents experienced worsened mental health over the past year. Women and youths self-reported lower mental health levels compared to other demographic groups. There was also a clear relationship between physical and mental well-being; those who reported worsened physical health over the past year also experienced worsened mental health.
Part 2 explored the impact of living arrangements and social connection on mental well-being. Social isolation appeared to be a factor; respondents who live alone self-reported worse mental well-being compared to those who live with others. Additionally, respondents who work from home every day also appeared to have worse mental health levels compared to those who worked from home less often.
Part 3 looked at the impact of changes to employment and income on mental well-being. The unemployed appeared most vulnerable mental health-wise, and similarly for part-time employees. Respondents earning less than RM 5,000 also appeared to experience worse mental well-being relative to other income groups.
In this fourth and final instalment of the research series, we sought to understand which of the variables included in our study were the most statistically significant in driving high scores in depression, anxiety and stress levels. We conducted a multiple variable analysis on the data set, using multiple linear regression.
Regression analysis is a statistical method used to determine the strength of the relationship between a dependent variable (in this study, self-reported mental health scores) and one or more independent or predictor variables (for example, age, gender etc.) in a regression model. Multiple regression analysis allows us to determine the relative contribution of each of the predictor variables to the model, in order to identify the most significant predictors.
Results of the Multiple Variable Analysis
The multiple variable analysis on our data set found age and gender as highly significant predictors of depression, anxiety and stress while marital status is a highly significant predictor of depression and anxiety (Table 1). Other significant predictors are change in income and level of household income. Comparatively, other variables such as living alone (i.e. household occupancy) and working from home frequency were not as significant as suggested by the descriptive analysis.
Table 1: Predictors of mental well-being
With respect to age, there is a very significant likelihood that people aged 35 years and younger are experiencing worse mental health in terms of depression, anxiety and stress levels compared to older age groups. Uncertainty over future prospects, financial distress, social isolation and lack of quality sleep have been attributed as the likely causes by a global cross-sectional COVID-19 and well-being study published this year.
As for gender, there is a very significant likelihood that women have worse depression, anxiety and stress levels compared to men. A study published last year exploring the impact of the pandemic on women shows that gender-related challenges such as parenting challenges, uneven distribution of domestic care and the increased risk of domestic violence are some of the key contributors to women’s mental health difficulties.
Marital status is a very significant predictor of negative mental health as well; there is a very significant likelihood that people who are single during the pandemic have worse depression and anxiety levels compared to those who are married. A relationship quality and COVID-19 study published last year showed that single individuals had poorer mental health compared to those who were in relationships of good quality. This is supported by a social relationships and health study that showed how social support systems and a sense of meaning found in relationships led to better mental health and health behaviours overall.
Change in income is a significant predictor for depression, anxiety and stress. Based on our data set, there is a significant likelihood that a fall in income over the past year is accompanied by higher levels of depression, anxiety and stress compared to an increase or no change in income levels.
The absolute level of household income is a significant predictor for anxiety; there is a significant likelihood that individuals with household incomes less than RM5,000 experience higher anxiety levels compared to those with higher household incomes.
In Part 2, we discussed the impact of social isolation on self-reported mental health scores, particularly in those living alone and those who work from home (WFH) daily. Although the descriptive analysis showed a somewhat clear pattern in negative mental health scores, the variables of household occupancy and WFH frequency were only weakly significant as predictors of negative mental health.
Employment status (e.g. whether full-time, part-time or unemployed), number of financial dependents and availability of personal space were not included in the regression model as these variables were highly correlated with some of the above-mentioned variables and were very weakly significant in explaining the patterns observed in negative mental health scores.
Conclusion
At the time of this writing, a full national lockdown had just been declared as it became clear that the third Movement Control Order then underway was not enough to bring down the rate of virus transmission. With case numbers breaching 9,000 a day, it is hard to visualise better days. But if we look to the history of past global pandemics and if the necessary precautions are taken, we can reasonably hope that the current worrying situation will gradually abate over the next one to two years.
However, we remain concerned about the long-term implications of the pandemic, beyond the immediate crisis. COVID-19 and successive lockdowns have amplified and exacerbated problems latent in Malaysian society, including widespread mental health challenges.
Our study found that young people, women, unmarried Malaysians and those with reduced incomes are the ones most likely to have negative mental health after the year-long pandemic (and counting). These findings are generally consistent with other mental well-being studies, both local and worldwide.
These are groups that require particular mental health outreach and support, now and after the pandemic, alongside the various measures of economic support that have been announced. It is crucial that these groups are intentionally targeted for mental health support services by the government and civil society.
In addition, it is also necessary to have institutional reform. We have to rethink how existing ministries and agencies are involved in mental health support. Although the Ministry of Health leads public mental health, mental health support and services are fragmented across different ministries, such as the Ministry of Women, Family and Community Development and the Ministry of Education. There is a need to rebalance assistance budgets in relevant ministries to ensure greater recognition for and a higher level of support for mental health modules within various existing socioeconomic assistance and relief programmes.
There is also an argument for decentralising service provision and resources, and empowering regional and local authorities to address healthcare issues based on detailed local knowledge and contexts, particularly amongst vulnerable populations.
The fallout of the COVID-19 pandemic will be felt for many years, or even decades, to come. We need to address these very real social challenges now, if we are serious about helping Malaysians navigate their way safely into the post-pandemic future.
Academics and researchers interested in the data and further details of this research project may contact the principal researcher at aziff@centre.my.
In February this year, we began a study to assess the effects of the then year-long pandemic on Malaysians’ mental health. At the time, a second nation-wide lockdown had just been declared. Data for this mental health study was collected via online survey which reached nearly 1,000 respondents from across the country*.
*Respondents’ mental health was measured by their responses to the DASS-21 questionnaire. For more details on how the DASS-21 questionnaire was applied, respondent demographics and the study’s overall methodology, please refer to Part 1. Please note that this is not a nationally representative stratified sample.
A descriptive analysis of the data was published in three parts, each tackling a different aspect of the general deterioration experienced over the past year. Part 1 showed that over half of surveyed respondents experienced worsened mental health over the past year. Women and youths self-reported lower mental health levels compared to other demographic groups. There was also a clear relationship between physical and mental well-being; those who reported worsened physical health over the past year also experienced worsened mental health.
Part 2 explored the impact of living arrangements and social connection on mental well-being. Social isolation appeared to be a factor; respondents who live alone self-reported worse mental well-being compared to those who live with others. Additionally, respondents who work from home every day also appeared to have worse mental health levels compared to those who worked from home less often.
Part 3 looked at the impact of changes to employment and income on mental well-being. The unemployed appeared most vulnerable mental health-wise, and similarly for part-time employees. Respondents earning less than RM 5,000 also appeared to experience worse mental well-being relative to other income groups.
In this fourth and final instalment of the research series, we sought to understand which of the variables included in our study were the most statistically significant in driving high scores in depression, anxiety and stress levels. We conducted a multiple variable analysis on the data set, using multiple linear regression.
Regression analysis is a statistical method used to determine the strength of the relationship between a dependent variable (in this study, self-reported mental health scores) and one or more independent or predictor variables (for example, age, gender etc.) in a regression model. Multiple regression analysis allows us to determine the relative contribution of each of the predictor variables to the model, in order to identify the most significant predictors.
Results of the Multiple Variable Analysis
The multiple variable analysis on our data set found age and gender as highly significant predictors of depression, anxiety and stress while marital status is a highly significant predictor of depression and anxiety (Table 1). Other significant predictors are change in income and level of household income. Comparatively, other variables such as living alone (i.e. household occupancy) and working from home frequency were not as significant as suggested by the descriptive analysis.
Table 1: Predictors of mental well-being
With respect to age, there is a very significant likelihood that people aged 35 years and younger are experiencing worse mental health in terms of depression, anxiety and stress levels compared to older age groups. Uncertainty over future prospects, financial distress, social isolation and lack of quality sleep have been attributed as the likely causes by a global cross-sectional COVID-19 and well-being study published this year.
As for gender, there is a very significant likelihood that women have worse depression, anxiety and stress levels compared to men. A study published last year exploring the impact of the pandemic on women shows that gender-related challenges such as parenting challenges, uneven distribution of domestic care and the increased risk of domestic violence are some of the key contributors to women’s mental health difficulties.
Marital status is a very significant predictor of negative mental health as well; there is a very significant likelihood that people who are single during the pandemic have worse depression and anxiety levels compared to those who are married. A relationship quality and COVID-19 study published last year showed that single individuals had poorer mental health compared to those who were in relationships of good quality. This is supported by a social relationships and health study that showed how social support systems and a sense of meaning found in relationships led to better mental health and health behaviours overall.
Change in income is a significant predictor for depression, anxiety and stress. Based on our data set, there is a significant likelihood that a fall in income over the past year is accompanied by higher levels of depression, anxiety and stress compared to an increase or no change in income levels.
The absolute level of household income is a significant predictor for anxiety; there is a significant likelihood that individuals with household incomes less than RM5,000 experience higher anxiety levels compared to those with higher household incomes.
In Part 2, we discussed the impact of social isolation on self-reported mental health scores, particularly in those living alone and those who work from home (WFH) daily. Although the descriptive analysis showed a somewhat clear pattern in negative mental health scores, the variables of household occupancy and WFH frequency were only weakly significant as predictors of negative mental health.
Employment status (e.g. whether full-time, part-time or unemployed), number of financial dependents and availability of personal space were not included in the regression model as these variables were highly correlated with some of the above-mentioned variables and were very weakly significant in explaining the patterns observed in negative mental health scores.
Conclusion
At the time of this writing, a full national lockdown had just been declared as it became clear that the third Movement Control Order then underway was not enough to bring down the rate of virus transmission. With case numbers breaching 9,000 a day, it is hard to visualise better days. But if we look to the history of past global pandemics and if the necessary precautions are taken, we can reasonably hope that the current worrying situation will gradually abate over the next one to two years.
However, we remain concerned about the long-term implications of the pandemic, beyond the immediate crisis. COVID-19 and successive lockdowns have amplified and exacerbated problems latent in Malaysian society, including widespread mental health challenges.
Our study found that young people, women, unmarried Malaysians and those with reduced incomes are the ones most likely to have negative mental health after the year-long pandemic (and counting). These findings are generally consistent with other mental well-being studies, both local and worldwide.
These are groups that require particular mental health outreach and support, now and after the pandemic, alongside the various measures of economic support that have been announced. It is crucial that these groups are intentionally targeted for mental health support services by the government and civil society.
In addition, it is also necessary to have institutional reform. We have to rethink how existing ministries and agencies are involved in mental health support. Although the Ministry of Health leads public mental health, mental health support and services are fragmented across different ministries, such as the Ministry of Women, Family and Community Development and the Ministry of Education. There is a need to rebalance assistance budgets in relevant ministries to ensure greater recognition for and a higher level of support for mental health modules within various existing socioeconomic assistance and relief programmes.
There is also an argument for decentralising service provision and resources, and empowering regional and local authorities to address healthcare issues based on detailed local knowledge and contexts, particularly amongst vulnerable populations.
The fallout of the COVID-19 pandemic will be felt for many years, or even decades, to come. We need to address these very real social challenges now, if we are serious about helping Malaysians navigate their way safely into the post-pandemic future.
Academics and researchers interested in the data and further details of this research project may contact the principal researcher at aziff@centre.my.
Bagaimanakah rakyat Malaysia membiayai pendidikan tinggi mereka? Bagi sebahagian besar generasi muda sekarang, jawapannya adalah melalui pinjaman pendidikan.
Hutang pendidikan merupakan sesuatu kebiasaan dan keunikan dalam kalangan generasi yang belajar di Institusi Pengajian Tinggi (IPT) dalam alaf baru ini. Ianya menjadi suatu kebiasaan disebabkan pengambilan pinjaman pendidikan secara meluas yang dikeluarkan oleh Perbadanan Tabung Pendidikan Tinggi Nasional (PTPTN), badan berkanun yang telah diwujudkan untuk menawarkan pembiayaan pendidikan tinggi dengan kos faedah rendah. Menurut sebuah laporan Agensi Kaunseling dan Pengurusan Kredit (AKPK) pada 2018, hutang pendidikan adalah hutang kedua yang paling biasa diambil dalam kalangan belia berusia 20-29 tahun.
Pada masa yang sama, hutang pendidikan juga unik bagi segenerasi rakyat Malaysia masa kini. Tidak seperti generasi terdahulu, golongan belia masa kini memikul beban hutang yang berat sebelum memasuki alam pekerjaan. Kami menganggarkan bahawa secara purata, pelajar yang mendaftar di universiti awam tempatan atau universiti swasta tempatan hari ini akan mengumpul hutang pendidikan masing-masing sebanyak RM26,600 dan RM56,120 untuk pengajian ijazah yang memakan masa empat tahun.1
Antara sebab yang telah meloncatkan populariti pinjaman pendidikan termasuklah pengembangan rangkuman pembiayaan jenis dan tempoh kursus dan pertambahan kelayakan jumlah institusi pendidikan tinggi swasta. Walau bagaimanapun, peningkatan beban hutang pendidikan juga telah didorong oleh pengurangan pulangan dari pendidikan tinggi. Menurut sebuah laporan terbaru dari Jabatan Perangkaan Malaysia, “graduan baru telah mencatatkan penurunan pendapatan bulanan di mana majoriti daripada mereka memperoleh antara RM1,001 hingga RM1,500 pada tahun 2020 berbanding RM2,001-RM2,500 pada tahun 2019.”
COVID-19 juga sememangnya memainkan peranan utama dalam perkara ini, tetapi sebelum penularan wabak ini, graduan baru telah pun menghadapi prospek pekerjaan yang tidak menentu, pasaran pekerjaan yang tidak sepadan dengan bidang pengajian, dan genangan gaji. Pada masa ini, impian untuk menikmati mobiliti sosial melalui pendidikan tinggi semakin kurang terjamin berbanding beberapa dekad yang lalu bila jumlah graduan dalam pasaran pekerjaan jauh lebih berkurangan.
Hampir dua tahun lalu kami telah menerbitkan primer tentang topik kos pendidikan tinggi di Malaysia yang telah memberikan gambaran umum mengenai yuran pendidikan dan kaedah pembiayaan. Kali ini, kami mengkaji strategi utama dasar nasional Malaysia dalam pembiayaan pendidikan tinggi, iaitu pinjaman pendidikan, untuk menjawab persoalan mengenai kelestarian dan kerelevanan jangka panjang dasar ini. Sebagai permulaan, kami meneliti sejarah pengasasan dasar ini.
1Mengikut jadual pinjaman PTPTN, jumlah tersebut diperolehi dengan mengira jumlah pinjaman penuh untuk kursus ijazah pertama selama empat tahun berdasarkan pengagihan (disbursement) tahunan yang berkelayakan bagi setiap pelajar IPTA / IPTS.
Pendidikan tinggi (dan pinjaman pendidikan) untuk semua
Pada awal tahun 1980-an, dua pertiga pelajar yang mendaftar di universiti awam Malaysia (terdapat hanya 5 universiti awam di Malaysia pada ketika itu) dibiayai oleh biasiswa kerajaan yang dianugerahkan oleh Jabatan Perkhidmatan Awam (JPA) atau oleh badan berkanun yang lain.2 Sebilangan kecil pinjaman pendidikan ditawarkan oleh agensi kerajaan seperti JPA dan Majlis Amanah Rakyat (MARA).3
Peralihan kepada pinjaman pendidikan sebagai kaedah utama untuk membiayai pendidikan tinggi bermula pada tahun 1990-an, didorong oleh tujuan untuk meningkatkan enrolmen di peringkat pendidikan tinggi dengan cepat dan menghasilkan tenaga kerja yang berpendidikan. Dasar ini lahir dari Dasar Persyarikatan Malaysia (atau Malaysia Incorporated) yang dimulakan oleh Perdana Menteri ketika itu, Tun Dr. Mahathir Mohamad. Tujuannya adalah untuk mengurangkan pergantungan pada sumber kerajaan, dan meningkatkan peranan syarikat swasta sambil mempromosikan kemajuan ekonomi Bumiputera.4
Umumnya, dua perubahan yang berkaitan berlaku pada masa itu – pengkorporatan universiti awam5 dan perkembangan institusi pengajian tinggi swasta yang pesat.6 Perubahan ini mewujudkan lebih banyak tempat pengajian di institusi pendidikan tinggi. Akan tetapi, ia juga telah meningkatkan kos pengajian. Hal ini juga telah menjadi isu politik yang hangat, terutamanya berkenaan keupayaan terhad pelajar Bumiputera untuk membayar yuran pengajian yang tinggi.7
Dengan demikian, idea pinjaman pendidikan sebagai dasar penyelesaian telah diperkenalkan, yang membawa kepada pembentukan badan berkanun PTPTN pada tahun 1997. Pada awalnya, PTPTN memberikan pinjaman pendidikan kepada 11 universiti awam (IPTA) dan beberapa universiti swasta (IPTS) yang dimiliki oleh beberapa syarikat berkaitan kerajaan (GLC).8 Permintaan untuk pinjaman pendidikan PTPTN juga telah meningkat, disebabkan kelulusan pinjaman yang mudah dan kadar faedah yang rendah.
Pada awal 2000-an, kelayakan pinjaman diperluaskan kepada pelajar dari institusi pendidikan tinggi swasta, termasuk kampus cawangan tempatan universiti luar negara. Selain memberikan pinjaman kepada pelajar dari lebih banyak institusi, PTPTN juga telah mula memberikan pinjaman bagi pengajian peringkat diploma dan sarjana.
Rajah 1 menunjukkan lonjakan jumlah bilangan pinjaman PTPTN yang diluluskan setiap tahun sementara Rajah 2 menunjukkan kenaikan jumlah amaun pinjaman PTPTN yang diluluskan setiap tahun. Lebih ketara lagi, amaun pinjaman PTPTN yang diluluskan untuk pengajian di institusi swasta melebihi amaun yang diluluskan untuk pengajian di institusi awam sejak 2007 (lihat Rajah 2), walaupun jumlah pinjaman yang diluluskan, atau jumlah peminjam, untuk institusi awam tetap lebih tinggi daripada institusi swasta (lihat Rajah 1).
Rajah 1: Bilangan Pinjaman PTPTN yang Diluluskan, 2000-2018
Rajah 2: Jumlah Amaun Pinjaman PTPTN yang Diluluskan, 2000-2018
Sumber: Laporan tahunan PTPTN, buklet Info PTPTN, dan laporan “Kelestarian Skim Pinjaman PTPTN” oleh Penang Institute.
2 Mehmet, O., Hoong, Y.Y. “An empirical evaluation of government scholarship policy in Malaysia,” Higher Education 14, 197–210, 1985. 3 JPA telah menamatkan penawaran pinjaman pendidikan beberapa tahun selepas PTPTN ditubuhkan untuk mengelakkan pertindihan fungsi. Peruntukan JPA telah dipindahkan ke PTPTN, yang mengambil alih peranan sebagai penyedia pinjaman pendidikan yang utama. 4 Lihat “Introduction” in the Privatization Master Plan 1991. Lihat juga Khoo Boo Teik, Beyond Mahathir: Malaysian Politics and its Discontents. Zed Books, 2003. 5 Universiti-universiti yang dikorporatkan dijangka dapat menambah dan mempelbagaikan sumber pendanaan mereka melalui pelbagai kegiatan yang dapat menjana pendapatan seperti perniagaan, menawarkan lebih banyak program yang dapat dikomersialkan, dan meningkatkan yuran pengajian untuk mengurangkan pergantungan pada peruntukan kerajaan. Untuk perincian, lihat: Molly Lee (1998), “Corporatization and privatization of Malaysian higher education.” International Higher Education, 10. 6 Penubuhan universiti swasta, penaiktarafan kolej swasta menjadi kolej universiti dan universiti, dan jemputan kepada universiti negara asing untuk mendirikan kampus cawangan di Malaysia telah dibolehkan melalui undang-undang, polisi-polisi dan badan-badan baharu yang dibuat untuk memfasilitasi perkembangan industri pendidikan tinggi pada tahun 1990-an. 7 Dalam beberapa Perhimpunan Agung UMNO pada pertengahan 1990-an, para perwakilan telah membawa isu enrolmen pelajar Bumiputera yang rendah di IPTS. Di samping itu, mereka memberi amaran bahawa sekiranya universiti awam dikorporatkan, pelajar Bumiputera akan terkesan akibat kenaikan yuran pembelajaran. 8 Oleh kerana enrolmen pelajar Bumiputera di IPTS sangat rendah, pinjaman PTPTN untuk IPTS hanya diberikan kepada pelajar Bumiputera dalam beberapa tahun pertama operasi badan tersebut.
Impak dan beban yang tidak dijangka
PTPTN ditubuhkan untuk meluaskan akses ke pendidikan tinggi, terutamanya untuk belia dari isi rumah berpendapatan rendah hingga pertengahan. Dari segi pinjaman yang telah diagih, PTPTN telah pun hampir mencapai misi ini. Rekod PTPTN antara tahun 2014-2018 menunjukkan bahawa 66% daripada semua peminjam adalah golongan Bumiputera dan 55% dari semua peminjam tergolong dalam isi rumah B40 (lihat Rajah 3). Taburan jumlah pinjaman hampir sama rata antara mereka yang meminjam untuk membiayai program ijazah dan program diploma.
Rajah 3: Demografi peminjam PTPTN, 2014-2018
Walau bagaimanapun, dua isu yang besar dan tidak dijangka telah menjadi semakin ketara sejak penubuhan PTPTN. Isu yang pertama ialah jangkaan peningkatan mobiliti sosial yang tidak menjadi kenyataan.
(i) Pulangan dari pendidikan tinggi
Premis asas pemberian pinjaman pendidikan adalah kemampuan peminjam untuk membayar balik berkat potensi pendapatan yang lebih tinggi yang datang daripada pencapaian tahap kelayakan pendidikan tinggi. Pada tahap makro, anggapan ini seolah-olah benar; pendidikan tinggi masih mendatangkan gaji median yang lebih tinggi secara keseluruhan berbanding dengan pendidikan menengah dan rendah, seperti yang ditunjukkan dalam Rajah 4.
Rajah 4: Gaji Median Mengikut Tahap Pendidikan
Sumber: Laporan Survei Gaji & Upah, 2014-2019, Jabatan Perangkaan Malaysia.
Tetapi, jika kita meninjau secara mendalam di sebalik angka-angka aras tinggi ini, kita boleh menyimpulkan bahawa pulangan dari pendidikan tinggi tidak diagihkan secara sama rata. Ketidaksepadanan tenaga kerja dan genangan gaji dapat dilihat dari data pendapatan dan pengangguran peminjam PTPTN.
Kajian Pengesanan Graduan Malaysia (SKPG) 2018 menunjukkan bahawa hampir 60% graduan menganggur atau kekal menganggur setahun selepas tamat pengajian mereka. Daripada bilangan siswazah yang menganggur ini, separuh mempunyai pinjaman pendidikan untuk dibayar balik.9 Dalam kalangan mereka yang bekerja, tinjauan tahun 2019 mengenai peminjam yang disurvei oleh PTPTN mendapati bahawa lebih daripada satu pertiga responden mereka berpendapatan di bawah RM2,000 sebulan.10
Pilihan kursus atau program pengajian nampaknya tidak menjelaskan mengapa sebilangan peminjam menghadapi nasib yang lebih teruk daripada yang lain. Tinjauan yang dilakukan oleh Parti Keadilan Rakyat (PKR) pada tahun 2013 mendapati bahawa lebih sedikit daripada separuh dari 1,053 responden dari pelbagai bidang pengajian dan jurusan berpendapatan di bawah RM2,000.11 Walaupun kerajaan menggalakkan kursus sains dan teknologi berbanding kursus kemanusiaan12, tinjauan itu mendapati bahawa majoriti merasa dibebani oleh hutang pendidikan mereka tanpa mengira bidang pengajian.
Lebih serius lagi, kombinasi isu jangkaan pendapatan lebih tinggi yang tidak direalisasi dan beban hutang pendidikan paling menjejaskan peminjam dari golongan B40. Kajian PTPTN sendiri menunjukkan bahawa 97% penghutang lalai yang ditinjau berasal dari kumpulan pendapatan B40.13 Menurut golongan penghutang lalai ini, komitmen hutang yang tinggi dan pendapatan rendah adalah sebab-sebab utama mereka tidak membayar balik pinjaman; kurang daripada 10% mengaitkan kekurangan pembayaran mereka dengan tindakan protes atau kelemahan kaedah pungutan hutang oleh PTPTN. Jelaslah di sini bahawa mobiliti sosial untuk peminjam B40 tidak terjamin melalui pencapaian kelayakan pengajian tinggi.
Selain daripada mobiliti sosial, timbul juga persoalan berkenaan kesaksamaan. Lazimnya peminjam dijangka habis membayar balik pinjaman dalam masa 20 tahun atau kurang, tetapi PTPTN membenarkan mereka untuk merundingkan penstrukturan semula pinjaman dan memanjangkan tempoh bayaran balik sehingga mereka mencecah umur 60 tahun.
Jika peminjam menangguhkan bayaran balik atau menstruktur semula pinjaman mereka (contohnya dengan membayar ansuran bulanan yang lebih rendah untuk tempoh yang lebih lama), akhirnya mereka akan membayar lebih banyak faedah berbanding dengan peminjam yang berpendapatan tinggi dan berupaya untuk membayar balik pinjaman dengan lebih cepat. Tempoh bayaran balik yang berpanjangan bermakna peminjam yang berpendapatan rendah bukan hanya membayar faedah yang lebih tinggi, tetapi sebahagian besar daripada kehidupan dewasa mereka ditempuhi dalam keadaan berhutang.
Memandangkan pulangan daripada pendidikan tinggi kurang terjamin pada masa ini dan telah menjejaskan golongan B40 secara tidak seimbang, adalah wajar untuk menilai semula pendekatan PTPTN sebagai instrumen dasar pembiayaan pendidikan tinggi.
9 Laporan Kajian Pengesanan Graduan 2018, Kementerian Pendidikan Tinggi Malaysia. Untuk suku pertama 2021, PTPTN membenarkan peminjam yang menghadapi masalah kewangan kerana pandemik Covid-19 untuk memohon penangguhan bayaran balik pinjaman. 10 Wan Saiful Wan Jan, “Malaysia’s Student Loan Company: Tackling the PTPTN Time Bomb,” ISEAS-Yusof Ishak Institute, April 2020. 11 Tinjauan ini adalah sebahagian daripada inisiatif dan kempen untuk menuntut pendidikan percuma di universiti awam. Dengan demikian, kaedah persampelan mungkin mencerminkan pengalaman pelajar dan lulusan universiti awam secara tidak proporsional. 12 Dorongan kerajaan terhadap kursus-kursus sains & teknologi tercermin dalam dasar: dalam kalangan kumpulan pertama peminjam PTPTN, mereka yang mengambil kursus sains dan teknologi dikenakan kadar faedah 2% manakala mereka yang mengikuti kursus sastera dan kemanusiaan dikenakan kadar faedah 4% . 13 Wan Saiful Wan Jan, Malaysia’s Student Loan Company: Tackling the PTPTN Time Bomb, ISEAS-Yusof Ishak Institute, April 2020.
(ii) Kemampanan kewangan PTPTN
Perkara yang sering dibangkitkan mengenai kelestarian kewangan PTPTN adalah cabaran memungut balik pinjaman dari penghutang. Jumlah pungutan sememangnya adalah lebih rendah daripada yang diunjurkan. Sosok si penghutang lalai yang ‘tidak bermoral’ sering dikaitkan dengan situasi ini, tetapi dakwaan ini hanya separuh sahih sahaja.
Melainkan terdapat pengecualian, kebanyakan peminjam PTPTN diminta untuk mula membayar balik pinjaman pendidikan mereka 12 bulan setelah graduasi dari program pengajian mereka. Daripada 3 juta peminjam, 1.9 juta sepatutnya sedang membayar atau telah melunaskan pinjaman mereka pada masa ini.
Rajah 5 menunjukkan jumlah bayaran balik pinjaman dan kurangan yang dihadapi oleh PTPTN. Dari segi jumlah peminjam, 81% daripada 1.9 juta peminjam yang sepatutnya mula membayar balik pinjaman mereka telah sama ada menyelesaikan pembayaran mereka, pernah/sedang membayar secara konsisten, atau pernah/sedang membayar secara tidak konsisten. Keseluruhan pinjaman yang dipungut dari 1.9 juta peminjam ini berjumlah RM14.3 bilion.14 Sekumpulan minoriti yang agak besar, 19% peminjam, gagal membuat pembayaran sama sekali dengan jumlah keseluruhan sebanyak RM2.8 billion.
Rajah 5: Pungutan dan Kurangan Pinjaman PTPTN, mulai 2018
Sumber: Laporan tahunan PTPTN 2018.
Seperti yang telah dinyatakan sebelum ini, tinjauan PTPTN sendiri menunjukkan bahawa hampir semua peminjam lalai berasal dari isi rumah B40 yang berhadapan dengan masalah kewangan.15 Tinjauan yang sama mendapati bahawa 74% peminjam tidak mempunyai pendapatan tetap atau berpendapatan di bawah RM2,000 setelah tamat pengajian berbanding dengan 52% peminjam. 16 Oleh itu, naratif dan retorik yang menggambarkan peminjam yang mempunyai tunggakan sebagai individu “tidak tahu malu” atau “tidak bertanggungjawab” adalah kurang tepat. Naratif pungutan hutang yang lemah juga kurang berasas – bayaran balik sukar dikuatkuasakan sekiranya peminjam tiada lebihan pendapatan
Bayaran balik hutang sememangnya sesuatu yang penting, namun isu yang lebih serius berkaitan kelestarian keadaan kewangan PTPTN (dan kurang dibincangkan) ialah struktur kewangan badan ini. Dalam lima tahun pertama operasi PTPTN, ia telah menerima geran langsung kerajaan untuk memberi pinjaman kepada pelajar. Selepas tempoh lima tahun ini, PTPTN telah bergantung kepada pinjaman dari pasaran kewangan, melalui pinjaman dan juga penerbitan sukuk, untuk membiayai operasi pemberian pinjamannya (lihat Rajah 6).17 Pada akhir tahun 2018, PTPTN mempunyai pinjaman yang dijamin oleh kerajaan yang berjumlah hampir RM40 bilion yang diramalkan akan meningkat kepada RM76 bilion dalam masa dua puluh tahun akan datang.
Rajah 6: Hutang Terkumpul PTPTN, pada akhir 201818
Jurang kadar faedah yang ketara antara pinjaman yang diambil oleh PTPTN (daripada institusi kewangan) dan pinjaman yang diberikan kepada pelajar menunjukkan suatu model yang jelas tidak mampan. PTPTN secara terbuka mengakui fakta ini apabila Pengerusinya menyatakan bahawa “PTPTN meminjam dari pasaran kewangan pada purata kadar faedah antara 4% hingga 5%, dan pada masa yang sama hanya caj 1% kepada peminjam. Perbezaan ini hanya memburukkan keadaan setiap tahun dan telah menyumbang kepada beban hutang PTPTN.” 19
Pinjaman yang diambil oleh PTPTN daripada institusi kewangan adalah dijamin oleh kerajaan dan melihat kepada saiz hutang yang belum dijelaskan, terdapat kemungkinan kerajaan dan pembayar cukai perlu menampung hutang dan pembayaran faedahnya selama beberapa dekad yang akan datang.
Pada tahun 2018 sahaja, PTPTN telah menerima RM 1.94 bilion dari kerajaan, di mana sejumlah besar daripada itu, iaitu RM1.74 bilion, digunakan untuk membayar kos faedah kepada institusi kewangan. Badan berkanun ini menganggarkan bahawa ia kini bertanggungjawab untuk hutang yang berjumlah hampir RM40 bilion dan faedah sebanyak RM13 bilion. Rajah 7 memberi gambaran pembayaran faedah PTPTN kepada institusi kewangan dari tahun 2011 hingga 2018, yang puratanya mencapai 73% dari perbelanjaan tahunannya.
Sumber: Laporan tahunan PTPTN dan Laporan “The Sustainability of the PTPTN Loan Scheme” oleh Penang Institute.
Memandangkan jumlah hutang yang banyak dan yang terus bertambah dari tahun ke tahun, adalah wajar untuk bertanya sama ada suntikan dana untuk melunaskan pinjaman institusi ini benar-benar membantu merealisasikan tujuan asal PTPTN, atau sama ada ia merupakan jalan yang berbelit untuk membiayai pendidikan tinggi melalui sistem percukaian negara.
14 Pembayar yang tidak konsisten adalah mereka yang membuat bayaran dan kemudian berhenti sebelum menyelesaikan hutang, atau mereka yang membayar secara konsisten tetapi pada kadar yang lebih rendah dari jumlah yang ditetapkan 15 Wan Saiful Wan Jan, Malaysia’s Student Loan Company: Tackling the PTPTN Time Bomb, ISEAS-Yusof Ishak Institute, April 2020. 16 Ibid 17 Ibid 18 Walaupun mereka mempunyai tempoh pematangan yang berbeza, kami mengumpulkan jumlah pelbagai sukuk yang dibeli oleh setiap institusi kewangan untuk tujuan ilustrasi di atas. Sukuk PTPTN dijamin tanpa syarat oleh Kerajaan Malaysia yang melindungi daripada kehilangan modal. 19 Wan Saiful Wan Jan, Malaysia’s Student Loan Company: Tackling the PTPTN Time Bomb, ISEAS-Yusof Ishak Institute, April 2020.
Impak meluas hutang pendidikan sebagai instrumen dasar kerajaan
Keperluan untuk mereformasi pembiayaan pendidikan tinggi telah diakui oleh penggubal dasar dan juga PTPTN melalui pelbagai cara. Seorang pegawai kanan PTPTN telah memberitahu penyelidik bahawa mereka mengambil berat isu pengangguran siswazah dan juga kemungkinan golongan belia menjadi muflis. “Kami bukan hanya bimbang tentang pungutan hutang, tetapi juga graduan yang tidak mempunyai pekerjaan tetapi mempunyai banyak hutang. Sebagai contoh, jika seseorang mengambil ijazah di IPTS, dia akan berhutang kira-kira RM 60,000. Cuba bayangkan jika anda mengambil kursus yang tiada permintaan di pasaran pekerja. Tiba-tiba anda mempunyai hutang sebanyak RM60,000. PTPTN juga mempunyai kuasa untuk membankrapkan orang. Jadi kami tidak mahu orang mempunyai hutang yang tidak mampu dibayar, terutamanya golongan muda.”20
“Kita sebenarnya…bukan worry pada duit (hutang) yang banyak sahaja, tapi juga graduate yang grad tapi tak ada pekerjaan dan ada hutang yang banyak. Just imagine, contoh kalau diorang ambil [degree] dekat IPTS so dia ada akan berhutang dengan kita dalam 60k..sekejap, degree IPTS 13-14k setahun, 4 tahun = RM 56,000. Just imagine kalau you ambil kursus yang belum tentu ada kerja. So RM56,000 tiba2 you ada hutang. And even…PTPTN boleh memufliskan orang. So kita tak nak..orang ada hutang yang salah, especially orang yang muda.“
Sejak tahun 2004, PTPTN telah mempromosikan skim simpanan SSPN dengan sokongan daripada kerajaan. Penabung dalam skim ini layak mendapat pelepasan cukai sehingga RM8,000. Penabung berpendapatan rendah juga layak mendapat sumbangan yang sepadan hingga maksimum RM10,000.
Lebih banyak perubahan mungkin berlaku pada masa akan datang. PTPTN baru-baru ini telah menyatakan bahawa satu rancangan strategi baru akan dilancarkan pada bulan Jun 2021 untuk menambah baik fungsi badan berkanun tersebut. Meskipun kami menantikan pengumuman ini, kami juga berpendapat bahawa masalah yang kita hadapi melangkaui isu daya maju PTPTN itu sendiri, dan ia merangkumi soal peranan pendidikan tinggi kepada negara dan penilaian semula model pembiayaannya.
Enrolmen pendidikan tinggi sering dipuji sebagai salah satu kisah kejayaan Malaysia. Tahun lalu, Jabatan Perangkaan melaporkan bahawa terdapat sebanyak kira-kira 5.3 juta graduan.21Enrolmen pelajar di institusi pengajian tinggi awam dan swasta pada tahun 2010 adalah enam kali ganda dari tahun 1990.22
Namun, seperti yang dinyatakan di atas, pulangan dari pendidikan tinggi tidak terjamin, terutamanya bagi penghutang pinjaman pendidikan dari golongan B40. Massifikasi pendidikan tinggi – baik dari segi enrolmen pelajar atau jumlah institusi pendidikan tinggi di negara ini – adalah sebahagian daripada masalah ini.
Sejak akhir 1990-an, PTPTN telah berfungsi sebagai penghubung ekosistem pendidikan tinggi di Malaysia dengan pemberian pinjaman pada kadar faedah yang rendah dan mudah diperoleh. Kolej-kolej swasta khususnya sangat bergantung pada pinjaman pendidikan, dan kolej-kolej dengan kualiti yang berbeza-beza telah berkembang pesat kerana kemudahan kelulusan pinjaman pendidikan yang ditawarkan melalui PTPTN dan kurangnya peraturan kualiti.21Peraturan-peraturan yang lebih baik diharapkan boleh mengurangkan jumlah kolej yang tidak berkualiti tetapi Malaysia masih perlu bergelut dengan soalan-soalan teras seperti yang berikut: pertama, apakah pulangan sebenar daripada pelbagai jenis pengajian yang ditawarkan dan kedua, bagaimanakah pendidikan tinggi atau pendidikan berterusan dapat dibiayai secara berkesan, adil dan saksama.
Dalam Bahagian 2 siri penyelidikan ini, kami akan mengutarakan kebaikan dan kelemahan pelbagai cadangan dasar untuk mereformasi hutang pendidikan dan pembiayaan pendidikan tinggi di Malaysia. Nantikan.
20 Temu ramah penulis dengan pegawai kanan PTPTN, 17 Februari 2020. 21 “Graduates Statistics 2019,” Jabatan Statistik Malaysia. diterbitkan pada 16 July 2020. 22 Malaysia Education Blueprint 2015-2025 (Higher Education). Kementerian Pendidikan Malaysia. 23 Kementerian Pengajian Tinggi telah berusaha untuk menguatkuasakan standard. Agensi Kelayakan Malaysia (MQA) ditubuhkan pada tahun 2007 dan pihak kementerian merancang untuk mewajibkan semua IPTS untuk dinilai melalui Sistem penilaian Kualiti Malaysia untuk Kolej Swasta (MyQuest) dan sistem penilaian Sistem Pendidikan untuk Pendidikan Malaysia (SETARA).
In Part 1 of this research series, we outlined the quandary of student debt in Malaysia. By all measures, student debt has increased exponentially in Malaysia. Since the establishment of Malaysia’s primary student loan institution PTPTN in 1997, the number of borrowers has increased, average loan amounts have risen, and the amount required to fund these loans has ballooned. Each year, approximately 200,000 new borrowers are created as they seek access to higher education via student loans.
A major problem highlighted in our previous article is the unrealised assumption of upward social mobility. The basic premise of student loans is borrowers’ ability to repay, thanks to higher earning potential from obtaining tertiary qualifications. However, multiple indicators show that many graduates do not have gainful employment, even before the onslaught of the COVID-19 pandemic.
The 2018 Malaysia’s Graduate Tracer Study (SKPG) showed that almost 60% of graduates were or remained unemployed a year after graduation. PTPTN also found that more than one-third of their surveyed respondents earn below RM2,000 a month. More seriously still, the combination of unmet higher earnings potential and the burden of student debt seems to impact B40 borrowers disproportionately as about 97% of the loan defaulters surveyed by PTPTN were from the B40 income group.
Who and how much to forgive?
If the policy preoccupation of the early 2000s is deliberate loan delinquency, recent years have seen concerns shifting towards involuntary loan delinquency due to unmet job prospects. This affects a segment of underprivileged and overburdened borrowers who are in a potent triple bind: disadvantaged by their household’s socioeconomic background, saddled with student debt and still facing low income mobility due to unmarketable qualifications.
Student debt forgiveness or cancellation, either fully or partially, is the leading policy proposal towards providing relief from repaying one’s student loans. In the United States, where astronomical student loans are a massive economic and political issue, student debt cancellation was a key plank in several presidential candidates’ 2020 election campaigns including Bernie Sanders, Elizabeth Warren, and incumbent President Joe Biden – the main difference across the candidates lay in proposed criteria and amount.
In Malaysia, then opposition coalition Pakatan Rakyat had campaigned for student debt cancellation in 2012-2013 following student protests led by Solidariti Mahasiswa Malaysia (SMM) and Gerakan Menuntut Pendidikan Percuma (GMPP). More recently, Lim Lip Eng, the Kepong Member of Parliament, recommended writing off PTPTN loans for B40 borrowers to release struggling families from their debts. Geoffrey Williams, an economist at the Malaysia University of Science and Technology had also called upon the government to recognise and write off PTPTN’s bad debts through debt cancellation.
Malaysia can and has implemented student debt cancellation to achieve assorted policy aims. To incentivise high levels of academic achievement, full loan cancellations have been offered since 2003 for PTPTN borrowers who complete their Bachelors’ degree with first class honours. As of 31st December 2018, 57,236 borrowers have been exempted from paying back their student loan under this scheme1.
To incentivise quicker loan repayments, partial loan cancellations have been offered since 2013 for PTPTN borrowers who can settle their loans in one lump sum or who repay their loans consistently2. There was even partial student loan cancellation offered for lower income borrowers aged 60 and over in the 2019 Budget speech3.
As pointed out in a 2016 research piece by Penang Institute, some of these partial loan cancellation policies are regressive in nature. Students who graduate with first-class honours tend to secure more job interviews and better paying jobs compared to their peers. More affluent borrowers are better positioned to settle their loans in one lump sum compared to lower income families.
Ultimately, student debt cancellation is not an untried measure in Malaysia when there is political will to enact. In view of this, rather than granting cancellation to those with better prospects to repay, we advocate targeted and partial student loan cancellation to the segment of borrowers identified as the most structurally underprivileged and overburdened.
A categorisation exercise on current borrowers is needed in order to determine who qualifies to be in this segment. Some factors that should be considered include their family’s socioeconomic background, the borrower’s past and recent years’ wages, the quality of qualifications received e.g. their field of study, level of their certification, and the status of the granting institution.
The partial loan cancellation for this borrower segment should be an impactful or significant amount of their remaining loan, e.g. RM20,000 or 50-80% of their remaining loan. In addition, those in this identified borrower segment who have been paying their loans for over 15 years should have their full remaining debt cancelled, in order to graduate these borrowers out of student debt. Currently, there is no ‘graduating out of debt’ timeline, no matter the circumstance.
Critics may say, what about extending the loan tenure? In our view, targeted partial debt cancellation is a morally stronger policy option for such structurally overburdened borrowers than extending the loan tenure. Loan tenure extensions result in such borrowers paying more interest and trapping them in debt for even longer.
Some state actors may be increasingly recognising the importance of relieving student loan burden. Early this year, the Sarawak state government through Yayasan Sarawak signed a Memorandum of Understanding with PTPTN to pay 30% of Sarawakian borrowers’ student loans once the borrowers pay 30% of their debt. Up to 9,000 borrowers from that state effectively had 30% of their debt ‘cancelled’ by this stroke of policy.
Of course, it would have been a much more progressive policy if the minimum threshold were waived and greater settlement amounts granted to qualifying lower income borrowers. Nevertheless, despite the missed policy opportunity here, tracking this move would still be invaluable to see the impact on borrower welfare and other outcomes. Supporting research in the United States suggests that student debt cancellations can improve both family stability and upward mobility, increase borrowers’ likelihood to start a business, accumulate a down payment on a home, have a child, save more for emergencies, return to school, and boost the economy.
On a separate note and in addition, the government should establish a grievance mechanism to investigate and potentially cancel debt for borrowers who have been misled by higher education institutions, or when a program is terminated or unaccredited, or when an institution is shut down, before the borrowers complete their studies4. At the time of writing, more than 500 students in Limkokwing University of Creative Technology (LUCT) were left with worthless degrees after provisional course accreditations were revoked by the Malaysian Qualifications Agency (MQA), with some students having paid up to RM72,000 in fees. Similar protection exists in Australia, to support student borrowers in the event that their education provider ceases in delivering their course or closes entirely.
Partial debt cancellation to encourage public service? As of the time of writing, the Canadian government offers to cancel $8,000 of student debt annually to doctors and $4,000 annually to nurses and nurse practitioners, as long as they work at least 400 hours in a remote or rural community. The benefit can be claimed for five years, which adds up to a significant amount of debt cancellation.
1 The cost of this loan cancellation was initially covered by PTPTN but shifted to the government since 2015. This group of borrowers represent 1.6% of the 3.5 million PTPTN borrowers as of 2018 and have had RM1.75 billion cancelled. Source: PTPTN Annual Report 2018. 2 Such discount incentives were introduced in Budget 2012 including a 20% discount for borrowers to settle their debt in one lump sum payment and a 10% discount for those who pay consistently for one year. These offers were discontinued/expired in December 2018. 3 Qualifying criteria was RM4,000 monthly income and below. The scheme was said to have benefited 350 borrowers with a cost of RM4.2 million. 4 The current policy to help affected students is by arranging credit transfers to another college. But we argue that students should be given the choice between transferring to a different college and continuing with their loan, or ceasing their studies and having their student loan cancelled.
Who should pay, when and how much?
Apart from the issue of structurally overburdened borrowers, two other questions pertaining to current outstanding student loans need to be resolved: when is it appropriate for borrowers to begin paying off their debts (threshold), and how much should they be paying (tiering)?
The default policy for PTPTN today is a time-based repayment scheme, where all borrowers are expected to commence paying their loan instalments 12 months after their graduation regardless of income level5. The current scheme does not differentiate borrowers’ varying levels of financial capability to repay their debts, which penalises those unable to pay as well as under-capitalises those who can.
The leading policy proposal to address this issue is the idea of income-based repayment where borrowers only begin to pay back their student loans after reaching an affordable level of income and where the repayment rate increases with rising income. The policy was first implemented in Australia. According to Bruce Chapman, professor at the Crawford School of Public Policy at the Australian National University6, Australia’s income-contingent loan system has inspired similar policies in New Zealand, South Africa, England, Hungary, Thailand, South Korea, and the Netherlands. Income-based repayment is considered fairer because repayments would be made only by those with feasible earnings while minimising hardship and default risk for borrowers earning less.
This policy was almost rolled out in Malaysia. Following the 2019 Budget speech by then Finance Minister Lim Guan Eng, PTPTN chairman Wan Saiful Wan Jan floated a plan called Scheduled Salary Deductions which sought to impose a progressive loan repayment schedule ranging from 2 to 15 percent of income depending on the borrowers’ monthly income7.
The plan was ultimately shelved due to fierce public backlash. One major source of backlash appears to be setting the monthly income threshold for loan repayment at RM2,000 (originally set at RM1,000, an astonishing figure considering that it is lower than the minimum wage) which many considered to be too low. Many borrowers were also upset that their monthly payments were scheduled for drastic progressive increases, from a typical RM150-RM 300 a month to up to RM1,200. Adding gasoline to the fire was the decision to make the changes mandatory and immediate.
In principle, we support income-based repayment as a way to facilitate higher and quicker repayments amongst borrowers with the capacity to repay. But a viable income-contingent loan policy needs to have a very good understanding of existing borrowers’ constraints and psychology.
Firstly, an income-contingent loan policy on existing borrowers should be implemented on an opt-in basis. Forcibly altering current repayment amounts without room for choice and flexibility, even amongst borrowers with relatively high incomes, will likely ignite anger and resentment as evidenced by the reception to the 2019 proposal. To motivate take-up of the opt-in scheme, one could take a leaf from the marketing of home mortgages, which shows a borrower how much more they stand to save or how much quicker they can get out of debt by increasing their monthly repayments.
Secondly, the threshold of repayment should be both economically and politically acceptable in order to avoid wholesale rejection of the policy. Setting an income threshold that is too low not only invites public uproar, it also sets up conditions for loan distress or default amongst low-income borrowers. In order to maximise policy acceptance and effectiveness, we propose that the threshold to repay is set at a level that allows for a minimum reasonable standard of living, either on par with the national median wage8 or a consumption-based figure such as the Belanjawanku by the Social Wellbeing Research Centre, which importantly also incorporates household size. As a benchmark, the Australian median personal income is $49,805 and their student loan repayment income threshold is currently set at $46,6209.
Thirdly, the tiering of loan repayments also needs to be acceptable to borrowers’ sense of personal affordability and choice. The tiering proposed by PTPTN in late 2018 was arguably too drastic. The tiering in Australia’s income-based repayment system, is much more gradual in its rate increases, had finer income bands and did not require payment exceeding 10% of their borrowers’ income. We compare the two tiering schedules in Figure 1 below.
Figure 1: Malaysia’s Proposed PTPTN Repayment Tiering 2018 vs. Australia
5 However, PTPTN does allow negotiations to restructure repayment on a case-to-case basis. Following the third round of ‘total lockdown’ imposed in June, the Minister of Higher Education announced that borrowers may apply for a three-month deferment to repay their loans. 6 And advisor to at least one major study on higher education financing commissioned by the Malaysian government. 7 To determine borrowers’ income levels, the government had worked out an inter-agency cooperation involving the Employers Provident Fund (EPF), Inland Revenue Board of Malaysia(LHDN), Retirement Fund Inc (KWAP), Accountant-General’s Department, Armed Forces Payroll Directorate and Public Service Department (JPA). PTPTN itself does not have automatic access to nor up-to-date records of its borrowers’ income. 8 Which has the additional benefit of moving in line with economic growth or contraction. The median wage figure is updated every year in the Salaries & Wages Survey Report; the latest available report (2019) has the median wage at RM2,442. 9 Up until four years ago, the threshold used to be around $56,000 but the Australian government gradually lowered the threshold to its current level. 10 Based on the latest B40-M40-T20 classification by the Department of Statistics. 11 Based on household percentile and annual income in a study by ACOSS/University of NSW.
But repayments will not be enough
The buzz around reducing borrower delinquency in past years may give one the impression that collecting repayments is the answer to PTPTN’s sustainability. However, the bitter truth is that even if all currently due outstanding loans were successfully repaid (which is highly unlikely), it would still not be sufficient to pay off PTPTN’s debts to financial institutions and to cover the cost of operations.
The gap between the interest rates charged by PTPTN to borrowers vs. the interest rates PTPTN must pay for its own borrowings is too large, as outlined in Part 1 of this research series. To illustrate the scale of the gap, in 2018 PTPTN collected RM400 million in interest repayment from borrowers but needed to pay RM1.7 billion in interest payments for its own borrowings12.
There is no option but to supplement PTPTN’s loan collections service these institutional borrowings with periodic government injections (as is the current practice) or outright takeover of the borrowings13. Either action must be funded by government revenues and taxpayers. Thus, the policy ‘solution’ in question here is less about how to close the financing gap (though, see ex-MP Rafizi Ramli’s suggestion to earmark oil revenues, amongst others14) and, in our minds, more about increasing the accountability and transparency in how PTPTN’s loans are funded. Given the current amounts involved, greater debate, analysis and oversight needs to happen.
In the current governance structure, it is unclear how lawmakers can play a meaningful role in overseeing PTPTN, or who gets to decide on major reforms in PTPTN. There are many stakeholders involved including the Minister of Higher Education, the Minister of Finance, and even the Prime Minister whose support is necessary to enact (or veto) proposals to reform PTPTN. To increase accountability and oversight, it may be more effective to place the purview of PTPTN under a single ministry and to empower legislators in monitoring the body.
What else would increasing accountability and transparency entail? Firstly, all studies commissioned by PTPTN and data collected should be made publicly accessible, and debated in parliament and/or select committees. Secondly, there should be formed – and empowered – both a parliamentary select committee and a parliamentary caucus on PTPTN and higher education financing so that elected representatives may provide increased debate, analysis and oversight. For instance, the Australian parliament has a Senate Standing Committee on Education and Employment, which allows lawmakers to deliberate on such matters and uphold public interest.
12 Loan interest revenue is the result of administrative costs 3% and ujrah 1% on student loans charged to the borrower. 13 Past examples include the bailout of FELDA and the gradual sukuk redemption in the restructuring of Tabung Haji. 14 In addition to proposing an Act to earmark a percentage of oil revenue into an education investment fund, Rafizi also proposed the issuance of new government bonds to cover PTPTN’s debts as an alternative.
Conclusion
This instalment of our research series on student loans in Malaysia advocates three bold policies to address issues related to current outstanding student debt: targeted partial debt cancellation, income-based repayment, and greater oversight on the workings and financing of PTPTN. In supporting these policies however, we reiterate the call for publishing all commissioned studies and data connected to PTPTN and higher education financing. Having more robust and in-depth policy research on student loans and higher education financing requires the public availability of micro-data as well as the contribution of all interested researchers, legislators and policymakers – not just a chosen few. Impact estimates of the above policy measures, such as this one by the Levy Institute for the United States, cannot be done for Malaysia with publicly available data.
A Select List of Studies on Student Debt in Malaysia
Chapman, Bruce and Michelle Tan. “The Australian University Student Financing System: The Rationale for, and Experience with, Income-contingent Loans”, in Student Loan Schemes. Experiences of New Zealand, Australia, India and Thailand and Way Forward for Malaysia, USM Press. 2009. 38-63.
Hock-Eam, Lim, Russayani Ismail, and Yusnidah Ibrahim. “The implications of graduate labor market performance in designing a student loan scheme for Malaysia.” In Income Contingent Loans. Palgrave Macmillan, London, 2014. 83-97.
Ismail, Russayani. “Equality of opportunity and student support schemes” In: The 5th ASEAN Symposium on Educational Management and Leadership (ASEMAL 5), 18-19 August 2007, Legend Hotel, Kuala Lumpur. 2007 (Unpublished).
Ismail, Russayani. “A Review, Investigation and Recommendation for National Higher Education Funding (Kajian Menyemak, Mengkaji dan Mencadangkan Transformasi Pembiayaan Pengajian Tinggi Negara”. Ministry of Education and PTPTN. 2012.
Ong Kian-Ming, Jonathan Yong, Chew Khai-Yen and Dickson Ng, “The Sustainability of the PTPTN Loan Scheme”, Penang Institute, December 2016.
PTPTN Public Consultation Paper, April 2019 (partial publication to the public).
PTPTN Strategic Plan 2021.
PTPTN Strategic Plan 2021.
Wan Saiful Wan Jan, “Malaysia’s Student Loan Company: Tackling the PTPTN Time Bomb,” ISEAS-Yusof Ishak Institute, April 2020.
Good policy research that can satisfy the needs of economic, social and political feasibility will be needed not only in addressing issues related to current existing student loans but also in working out changes to new student loans moving forward. In the next part of this series, we will discuss the broader changes needed in the policy of student loans and higher education financing in the future.
Migrant labour has long played an integral role in Malaysia’s history, formation and nation building. Between 1880 and 1939, Malaya absorbed the highest number of immigrants per population in the world to work on tin mines and rubber plantations. It was a period of mass migration that had a long lasting social, economic and political impact.
More than a hundred years later, Malaysia is Asia’s largest net importer of labour, heavily reliant on migrant labour in several key economic sectors. Unfortunately, our long history and extensive experience has not translated itself into long-term and robust migrant worker policies. As a country, we seem to repeat cycles of mass recruitment followed by cycles of ‘regularisation’, earning reproach from human rights watchdogs and international export sanctions in the process.
Our long-term goal to reduce our dependence on migrants is frequently undermined by contradictory short-term policies, leading to the accumulation of a high number of legal and illegal migrant workers. In Part I of this research series, we outline where we are today and explore the factors that have led to the current situation.
A Snapshot Of The (Legal) Numbers
Based on the number of Visitor Pass (Temporary Employment) or VP(TE) permits that have been issued, Malaysia officially hosts 1.99 million legal migrant workers as of August 2019. As shown in Figure 1, the distribution of migrant workers is highly concentrated – 62% are in 3 states, with the central territories of Selangor and Kuala Lumpur hosting 44% and the southern state of Johor hosting 18%.
Figure 1: Distribution of migrant workers by state, 2018
Based on July 2018 VP(TE) data from the Ministry of Human Resources and the Immigration Department, the sector employing the highest number of VP(TE) holders is manufacturing which employs 37% of legal permit holders, followed by agriculture (24%), domestic workers and services (21%) and construction (18%).
Figure 2: Number of VP(TE) holders by sector and country of origin, July 2018
The distribution of VP(TE) holders by country of origin as shown in Figure 1 above points to the changing demographics of migrant workers in Malaysia. Workers from Indonesia, who represented the largest proportion of migrant workers in 2000 at 75%, comprised only 40% of migrant workers in 2018 (Figure 2). The number of Bangladeshi migrant workers have also shrunk though not as dramatically, from 20% to 15% of total migrant workers. The most significant growth is in the number of Nepalese migrant workers, from virtually 0% in 2000 to 22% of total migrant workers in 2018.
Figure 3: Number of migrant workers by country of origin, 2000-2018
Two major driving factors are the relative strength of the economy and relative wages between Malaysia and the origin country, which affected Indonesian migrant worker numbers most. Malaysia’s GDP per capita in 1970 was 4.5 times that of Indonesia; in 2019, the differential had shrunk to 2.7 times.
Indonesia has also been progressively increasing the minimum wage level, where workers in palm oil plantations could stand to earn, in 2018, up to Rp6,000,000 (RM1,724) without being subjected to miscellaneous deductions, fees and long separations from family. If these trends continue, it is likely that we shall see a shrinking proportion of Indonesian migrant workers which could result in unanticipated cultural and political issues here in Malaysia.
But What Are The Real Numbers?
The problem with the snapshot above, however, is that it is far from being an accurate or complete picture of the migrant worker population in Malaysia today. The number of VP(TE) holders make up only a subpopulation of migrant workers and there is a great deal of uncertainty around the number of migrant workers without valid permits, or ‘illegal’ migrant workers.
On the low end, the Department of Statistics Malaysia’s 2019 Labour Force Survey estimates that the total number of foreign workers, both legal and illegal, come up to 2.24 million people in 2019. With 1.99 million legal VP(TE) holders, this indicates only 246,000 illegal migrant workers in Malaysia.
On the high end, the ISEAS-Yusof Ishak Institute suggests that there are as many as 3.9 to 5.5 million migrant workers in 2018, implying the existence of 1.9 to 3.5 million illegal migrant workers in Malaysia. These numbers would outstrip the number of valid VT(PE) holders or legal migrant workers – a staggering state of affairs if true.
While methodological differences partially explain the wide range in estimates, the implications are still of great concern. Migrant workers, both legal and illegal, could represent anything between 7% to 17% of Malaysia’s 2019 population, or 14% to 35% of Malaysia’s 2019 labour force. Such hugely varying numbers make it difficult to determine whether national targets have been met, such as the 11th Malaysia Plan target of capping migrant workers to 15% of the total labour force.
The unreliability of official migrant worker figures is partially a reflection of Malaysia’s ageing immigration systems. A 2016 Public Accounts Committee hearing highlighted a number of issues including the issuance of the same VP(TE) serial numbers for different migrant workers, VP(TE) extensions being granted by IT vendors without approval from the Immigration Department, and the practice of manual calculations and adjustments to determine how many VP(TE) holders there are at any point in time. The announcement to develop a National Integrated Immigration System (NIISe) could be a major improvement in improving data on migrant workers*, but this is only the tip of the iceberg.
*Note: Basic infrastructural issues also contribute to bad data. In East Malaysia especially, frequent power blackouts have prevented immigration officers from conducting electronic blacklist checks and the recording of traveller movements onto the central immigration database. There are, moreover, many ‘informal’ border locations with no guards, immigration office, fences or walls. Policing Malaysia’s porous borders is a major challenge with a land boundary of 2,669 kilometres and a coastline of 4,675 kilometre.
The ‘Groundhog Day’ Of Boom-Bust Cycles
The larger and more foundational issue, we argue, is Malaysia’s approach to migrant worker recruitment and economic planning today. Despite targets to reduce the country’s reliance on low-cost migrant labour, we still observe the same waves of recruitment and round-ups following phases of the economic cycle.
Increase in economic activity would be accompanied with an increase in demand for migrant workers. The pressures to raise the migrant worker quota from companies (see primer) would result in allowing increased importation of labour, as well as ‘regularisation’ or legalisation of migrant workers without valid permits.
When the economy turns less active, demand for maintaining migrant workers would decline. Many migrant workers would find their permits allowed to lapse, rendering them as illegals and exposing them to enforcement action, detainment and deportation. When the economy improves, this cycle begins again.
Malaysia needs to make a clear break from cyclical recruitments and round-ups towards a more long-term migrant worker policy, rooted in clear sectoral planning as well as residency privileges. We discuss a few options in the next instalment of this research series, but in the meantime, we highlight two more migrant worker policy approaches in dire need of change.
When Processes Allow For Exploitation
A long-term outlook on sectoral planning and migrant worker recruitment would be ineffective unless accompanied by significant improvements to current processes. The migrant worker hiring process for example, provides many opportunities for unethical practices.
In order to work legally in Malaysia, migrant workers are often expected to take on the burden of costly up-front recruitment expenses. A large number of migrant workers incur debt in order to finance these expenses, even though such expenses are supposed to be borne by their employers. For example, up-front recruitment costs paid by a Bangladeshi worker can be as high as RM20,000 per person. Those who have not finished paying off their debt by the end of their employment pass validity would be inclined to overstay and work illegally; it has been reported that almost 70% of Bangladeshi workers overstay due to debt.
Malaysia’s treatment of migrant workers and refugees has been criticised at home and abroad due to high profile cases of mistreatment, poor working conditions and xenophobia. Many of the issues mentioned came to the fore in 2020, when the US Customs and Border Protection banned the importation of surgical gloves from Malaysia’s Top Glove and WRP Asia for having conditions akin to forced labour. A month later, the US Department of Labor did the same, specifically citing high recruitment fees, debt bondage, the retention of identification documents and deplorable working conditions.
In response, the Malaysian Rubber Glove Manufacturers Association announced commitments of RM250 million to pay recruitment fees that foreign workers paid to agents in their home countries, which Malaysian employers were “unaware of”. Around the same time, the US Customs and Border Patrol also banned imports of palm oil from Malaysia’s FGV Holdings for also using what the former took to be forced labour, which was met with denials from the company.
To conclude Part I, our migrant labour issues are multifaceted and complex, but they are all arguably rooted in a short-termist outlook and questionable set of values towards imported labour.
Quantifying the number of migrant workers present in Malaysia, both legal and illegal, is a critical step in understanding the magnitude of the problem as well as to support data-driven policymaking and impact assessment. The processes, systems and infrastructure that contribute to the illegal migrant worker numbers also need to be addressed, while doing so in a humane and even-handed manner.
In our second instalment we will delve deeper into the trade-offs involved in potential solutions, before we propose a set of policies in our third and final part.
