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Room For Rent, Part 2

Renting has been the only viable housing option for many young and lower-income Malaysians but the Malaysian rental market is plagued with a lack of transparency and protection. We take a look at global policy approaches that could make renting better for Malaysians.

In Part 1 of this research series, we highlighted Malaysia’s longstanding policy focus on home ownership against the backdrop of a still significant proportion of ‘hidden renter-households’, or households that do not own their homes, particularly in the Klang Valley region.

The proportion of renter-households may rise in the near future. A recent survey by PropertyGuru found that there is a substantial increase in the Rental Demand Index, suggesting that many home seekers are now opting to rent.

Despite the growing demand for rental units, the Malaysian government has continued to prioritise policies to promote home ownership, including the recent “One Family One House” pledge by the Prime Minister. He has also urged Bank Negara Malaysia to review financing models to ease home ownership among B40 and M40 households.    

Compared to home ownership, there is a lack of policy attention on regulating the rental market and encouraging renting as a viable and attractive option. 

In this instalment of our research series, we examine pro-renting policies implemented in other countries to see what options Malaysia may consider to strengthen and enhance the rental market. In our assessment, three broad policy tenets or pillars should be undertaken: enacting stronger tenant protection, incentivising rental supply expansion, and adopting rent stabilisation.

Pillar 1: Strengthen tenant protection

The first policy tenet is to strengthen tenant protection. Today, there is inadequate protection for tenants in Malaysia, especially on two major issues.

The first issue is tenure security. Currently, security of tenure in Malaysia lasts only throughout the tenancy duration, which commonly extends to two or three years at most. Upon the tenancy’s expiration, the landlord has the right not to renew the agreement regardless of the tenant’s situation or intention. 

In renter-friendly countries such as France, tenants enjoy greater security of tenure. Tenancy agreements last for a longer period – at least three years for individual-owned and six years for institution-owned unfurnished properties. Short agreements are only allowed if the owner has due personal cause to reoccupy the house (for retirement, housing a family member, etc.)  While furnished property can be rented out in a one-year contract, the agreement is automatically renewed unless either party gives a termination notice. 

Tenants in Malaysia are also exposed to eviction risk in the event of change in ownership of the rented property. If the new owner refuses to honour the tenancy agreement, then the tenant may be forced to evict the property.  

While there are a few regulations to protect tenants from unfair eviction – such as Section 7(2) of the Special Relief Act which requires a court order to be obtained before a landlord can remove an existing tenant – tenure security in Malaysia still falls short of the standards in some developed countries. 

Landlords in France are only permitted to evict tenants under specific circumstances such as if the tenant abuses their rights or if the landlord wishes to physically reside in the property – even then, the landlord must provide six months’ notice before moving in. Unlike in Malaysia, ownership transfer is not a sufficient reason for landlords in France to evict tenants.

Even in the event that the landlord or owner wants to sell their property, tenants in France still enjoy a decent level of protection. If the owner wishes to sell the property, a right-to-buy priority must first be extended to the tenant. He must also provide a minimum of six-months’ notice to the tenant.   

The general process of terminating a tenancy is also highly restrictive. In most cases, tenancy termination requires a minimum of six months’ notice, and only takes effect after the contract expiry. A two-month termination notice period clause may be included in the contract but may only be executed if the tenant fails to pay rent, or fails to obtain a home insurance. Furthermore, under the la trêve hivernale (the winter truce) rule, eviction is forbidden during the winter months.

Germany similarly provides a greater degree of tenure security compared to Malaysia. Landlords in Germany may only provide a termination notice under strict conditions such as if there is a manifest breach of contract, if the landlord wants to occupy the premise, or if the landlord has justified reason to make better economic use of the premise. Even so, tenants are empowered to object to a termination notice if the termination causes hardship to the tenant or his family. The notice must also be given three to nine months in advance depending on the tenant’s total tenancy period.

The second issue is the handling of security deposits, which in Malaysia is typically paid upfront by the tenant and held by the landlord until the end of the tenancy. Security deposits are intended to serve as a guarantee that the tenant will preserve and maintain the rented property’s condition. Failure to do so enables the landlord to deduct or withhold the deposit for reparation work. 

However, there is a risk of dispute where tenants claim that their security deposit is unfairly deducted or withheld by the landlord. When such a tenant-landlord conflict arises over security deposits, there is no mechanism to resolve the dispute except by going to court, which can be a costly process to both landlords and tenants.1

There is a better way to resolve this tenant-landlord conflict. The state of Victoria in Australia has created an institutionalised mediation process in the case of tenant-landlord conflict regarding tenancy matters such as eviction and security deposit claims. The Victorian Civil and Administrative Tribunal (VCAT) also allows for faster adjudication of disputes between landlord and tenant compared to formal courts enabling tenants to seek immediate legal protection in case of unjust treatment by their landlords.  

They also formed a neutral third-party body, the Rental Tenancies Bond Authority (RTBA), to take over the responsibility of managing tenants’ security deposits from the landlords. RTBA would receive the deposit at the beginning of a tenancy, and return the full amount to the tenant at the end of the tenancy. If the landlord wishes to dispute the amount returned – perhaps due to damages caused by the tenant – he or she can file a petition to VCAT.

There is now realisation that legislation on renting is sorely needed. Early this year, the Ministry of Housing and Local Government announced its commitment to table a Residential Tenancy Act (RTA) sometime in 2022. Initial documents shown during the public consultation stage indicated that the proposed RTA will contain provisions for stronger tenant protection. 

Following the announcement, the Real Estate and Housing Developers’ Association (REHDA) pushed back against the proposed RTA and instead argued that its application should be limited to rentals below RM750 monthly. 

We at The Centre acknowledge the concerns posed by REHDA which champions private landlords’ right, and preference, to manage their rented properties without government interference. However, limiting the RTA’s application to rentals below RM 750 monthly  will reduce the RTA’s coverage and effectiveness. We believe that  a clear legal framework to regulate tenancy rights should exist and be applicable across the rental market. 

Having an RTA will facilitate a clearer tenant-landlord dispute resolution process on both issues of security of tenure and security deposits. We also recommend that the RTA further enhance tenancy protection by creating a tenant/landlord database. Potential tenants may be alerted to problematic landlords prior to finalising a rental agreement. This may include landlords who have abused their rights such as practicing discrimination or unfairly deducting their tenant’s security deposit.

Similarly, landlords may also utilise the database to filter “bad tenants” i.e. those who consistently missed rental payments, have caused considerable property damage or have committed criminal acts in their rental units. Having such a database provides greater protection for both tenants and landlords, which would enhance the local rental market.

Pillar 2: Expand rental supply 

The second tenet is to enhance the rental market by incentivising increases in rental housing supply. 

The Malaysian government has been providing tax incentives as a measure to encourage the private rental market though the incentives have mainly targeted individual landlords. For instance, landlords in Malaysia may deduct rental-related costs  from their taxable rental income. These include mortgage interest on loan, maintenance/reparation costs, fire/burglary insurance, assessment tax and quit rent, rent collection fees, and new tenant search expenses. In 2018, landlords were even entitled to 50% tax exemption on their rental income.

To significantly increase the supply of rental units, there is room for innovation here. Consider, for example, tax incentives for institutional owners of rental properties such as private corporations, social enterprises, housing associations and real estate trusts. 

The US government has encouraged the development of affordable rental housing by private entities for almost 40 years through a scheme known as Low-Income Housing Tax Credit (LIHTC). Under this scheme, the federal government grants tax credits to developers or investors to construct affordable rental housing projects catered to low-income and middle-income tenants. In order to qualify for the credit, the rental rate must be below an “affordable” threshold2, and a certain percentage of the housing project must be affordable. 

LIHTC is estimated to have supported the construction or rehabilitation of 3 million units of rental housing since its inception, and is the largest source of affordable housing financing in the US. 

Apart from private firms, tax incentives can be extended to social housing providers to cater to disadvantaged or special interest groups such as low-income families, minorities, elders, and students. Housing associations have built a quarter of England’s new homes and are estimated to house six million people. As they contribute considerably to the provision of affordable rental housing3, these associations and their subsidiaries are exempted from the residential property developer tax which was introduced in the UK last year.4

These aforementioned tax incentives can be taken as a guideline to spur various entities in Malaysia to provide more rental housing units at scale, entities such as government-linked companies, private firms, social enterprises, religion-based waqf and zakat authorities to name a few. 

Alternatively, these entities may also be encouraged to convert existing vacant and unsold premises into rental homes. The conversion of vacant premises into rental homes is becoming a trend in the US due to increased popularity of remote and hybrid working in the wake of the Covid-19 pandemic.5 This solution may be useful in Malaysia where decreased occupancy rates in office and retail spaces have been reported. Occupancy rates in both categories dropped from 83.3% and 81.3% in 2017 to 78.3% and 76.3% in 2021. 

Incentivising conversions into residential rental units not only increases rental home supply, but also reduces the quantity of unsold and vacant units in Malaysia’s property market. While tax incentives can be a good facilitator, other factors too need to come into play for this conversion strategy to work, such as easier access to up-front financing, favourable rezoning laws, attractive location and floor plan.

Pillar 3: Adopt rent stabilisation 

The third tenet involves stabilising rental rate increases to provide some degree of certainty for long-term tenants and to reduce the risk of hardship from sudden significant rent hikes. 

Global data indicate that rental rates have risen rapidly especially after the Covid-19 pandemic. Cities across the US have reported drastic rise in rental rates with some – such as New York, Austin, and Miami – exceeding 30% in a year. The trend is observed closer to home too in Singapore where rental rates have similarly spiked, reaching a seven-year high in 2022. 

The government may intervene in the rental market without necessarily resorting to rent control, which is still controversial.6 Rather, another way to provide for rent stability and moderate increases is via benchmarking or pegging. 

Some European countries have such policies in place. Landlords in Germany, for example, are not allowed to raise rent during the first 12 months of a tenancy, and are permitted to raise rates to a maximum of 15%-20% within a three-year period. 

Furthermore, landlords are legally restricted from arbitrarily raising rents. If a tenant feels that the rent increase is unjustifiable, then he may dispute it by referring to the local renting association, which can provide assistance in the form of legal fees and rental statistics. If the landlord fails to justify the increase, then the tenant is entitled to refuse the new rate. 

Alternatively, the government can peg the increase in rental rates to relevant benchmarks, such as the consumer price index (CPI).  This is observed in France where any rental increase must be referred to the Rent Reference Index (IRL). IRL is calculated every quarter based on year-on-year changes in consumer prices (excluding tobacco and rent), and provides some degree of predictability to tenants as well as landlords. 

French landlords may raise rents only once a year, and only if such a clause is included in the tenancy agreement. If it is not included, then any rent increase must wait until the tenancy expiry. 

The requisite condition for a rental stabilisation mechanism to work, however, is rental data transparency and availability, which is currently lacking in Malaysia. We urge the government to publish a rental index that tracks the historical movement of rental rates based on location and type of residence, which is available in certain countries such as Singapore. 

The city-state, via its rental index, has seen its private rental rates reaching a new all-time high in May 2022 following 16 months of consecutive increase. Through such an index, the Malaysian government will be able to identify areas with a red-hot rental market and implement cooling off measures or rental assistance programmes to assist financially-burdened tenants.

Conclusion

As household debt increases and home prices remain unaffordable to many Malaysians, demand for rental units has surged in recent years and merits policy attention. This is especially pertinent for lower-income households in urban areas for whom renting is a more practical option, if not the only possible one, perhaps for an extended period of time. 

While the government continues to promote home ownership, it should also enhance the rental market and make renting better for Malaysians. In this instalment, we advocated for three policy tenets towards addressing existing concerns plaguing the rental market: legislate stronger tenant protection, provide incentives to increase supply of rental units at scale and introduce a rental rate stabilisation mechanism.

In part three of this series, we will present the findings of a comprehensive survey on rental norms, risks and perceptions in order to better understand the concerns faced by tenants. Stay tuned.

  1.  Any tenancy-related dispute is currently adjudicated in court according to the Contracts Act 1950, Civil Law Act 1956, Distress Act 1951, Specific Relief Act 1950 and the Common Law.
  2.  Under the LIHTC, a unit is deemed affordable if the tenant spends not more than 30 percent of their monthly adjusted gross income on housing costs i.e. rental plus utilities. 
  3.   Affordable rented homes are usually rented out at 80% of the local market rent while social rented homes at 50% of the local market rent. 
  4.  Housing associations have built a quarter of England’s new homes and are estimated to house six million people. In the past, these associations relied largely on public funding to build social homes – 419,000 new homes were built from 1990 to 2010. After public funding was significantly reduced in 2010, these associations sustained themselves by developing homes for sale and market rent, and reinvesting the proceeds into building more social homes. Through this strategy, 20,000 social rental homes and 77,000 affordable rental homes were constructed from 2015 to 2019.
  5.  In 2021 alone, RentCafe calculated that a record 20,100 units have been converted into apartments, double the previous year, with about 52,000 conversions already planned for 2022 and beyond. Most of the converted units were originally office buildings.
  6.  Rent control has been largely frowned upon in the US. 37 of the country’s states have laws that preempt local governments from adopting rent control such as the Illinois’ 1997 Rent Control Preemption Act. Notwithstanding this context, tenants’ drastic rise in rental burden has generated stronger pressure for local governments to intervene in the rental market. Regulations are now being proposed throughout the country to cap monthly rental increases by 2% to 10%.

Generasi Berhutang, Bahagian 4

Tahun lepas, kami memulakan sebuah siri penyelidikan untuk meneliti masalah hutang pinjaman pendidikan tinggi di Malaysia, dan mengesyorkan beberapa perubahan dasar pokok ke arah menyelesaikan masalah berkaitan pinjaman tertunggak serta isu-isu sistemik jangka panjang. 

Dalam Bahagian 1 siri penyelidikan ini, kami merumuskan beberapa isu berbangkit. Sejak penubuhan PTPTN pada tahun 1997, sebanyak RM62.5 bilion yang berupa pinjaman pendidikan telah dikeluarkan kepada 3.5 juta peminjam. Kejayaan kaedah pembiayaan ini bergantung pada pulangan positif yang luas dan konsisten daripada pendidikan tinggi. Walau bagaimanapun, prospek mobiliti sosial daripada pendidikan tinggi tidak direalisasikan secara sama rata, lalu memberi tekanan kepada pendekatan dasar ini.

Dalam Bahagian 2, kami mengutarakan tiga cadangan dasar baru untuk menangani isu berkaitan hutang pinjaman pendidikan yang tertunggak pada masa sekarang: penghapusan hutang bersasar, pembayaran balik berasaskan pendapatan, dan pengawasan yang lebih ketat terhadap operasi dan pembiayaan PTPTN. Pembahagian peminjam sedia ada mengikut keupayaan mereka untuk membayar balik pinjaman merupakan tonggak utama kepada cadangan-cadangan kami.

Dalam Bahagian 3, kami melontarkan cadangan dasar yang berpandangan jauh untuk memperbaharui cara rakyat Malaysia membiayai pendidikan tinggi mereka. Kami berhujah agar penggubal dasar menghayati perubahan semasa lanskap pendidikan tinggi dan menggubal dasar yang berkembang mengikut keperluan terkini. Ini termasuk mengurangkan penekanan pada ijazah tradisional dan mengembangkan fokus kepada TVET dan kelayakan mikro, beralih daripada kaedah pinjaman kepada pemberian subsidi terus untuk pelajar daripada isi rumah yang kurang bernasib baik, dan menyediakan akaun pembelajaran sepanjang hayat individu untuk setiap rakyat Malaysia.

Dalam bahagian terakhir siri ini, kami kongsikan dapatan daripada tinjauan peminjam pinjaman pendidikan tinggi kami. Tinjauan ini bertujuan untuk memahami pandangan peminjam mengenai pinjaman pendidikan dan kesan pinjaman tersebut terhadap kehidupan mereka. Majoriti responden tinjauan bersetuju bahawa pinjaman pendidikan merupakan ‘harga yang berbaloi’ untuk mencapai kelayakan pengajian tinggi. Namun begitu, mereka juga amat menyokong cadangan-cadangan dasar progresif seperti pemberian subsidi terus kepada pelajar yang kurang bernasib baik, dan pembayaran balik berasaskan pendapatan individu. Pada masa yang sama, kami mendapati ramai responden masih kurang pengetahuan tentang cara PTPTN, yakni penyedia pinjaman pendidikan terbesar di negara, menjalankan operasi pinjamannya. Dapatan-dapatan lain yang signifikan akan diperincikan dengan lebih lanjut di bawah.


Mengenai kaji selidik ini

Tinjauan ini telah dijalankan melalui soal selidik dalam talian, diedarkan menggunakan kaedah persampelan mudah, antara 3 Ogos hingga 17 September 2021, dalam Bahasa Melayu dan Bahasa Inggeris. 

Memandangkan kaedah persampelan kami bukanlah persampelan rawak berstrata, dapatan kajiselidik ini mesti dibaca dengan pertimbangan tersebut. Berdasarkan respons yang telah kami terima sepanjang tinjauan, kami menganggarkan bahawa responden lebih condong untuk terdiri daripada orang bandar, tetapi agak representatif dari segi demografi lain seperti umur dan jantina. Walau bagaimanapun, kami mengakui bahawa anggaran ini hanya boleh disahkan dengan akses kepada pangkalan data peminjam, yang kini tidak dapat diakses oleh orang awam dan para penyelidik.

Sebanyak 356 respons telah diperoleh sepanjang tempoh kajian yang mana 53 terpaksa diabaikan kerana status mereka sebagai bukan peminjam dan dua lagi dikecualikan kerana maklumat responden yang tidak konsisten, menjadikan 301 sampel respons yang boleh digunapakai.

55% daripada responden kami adalah perempuan. 73% responden berumur antara 25-40 tahun, 19% berumur antara 17-24 tahun, dan 8% berumur antara 41-55 tahun. Dari segi kumpulan etnik, 71% adalah Melayu, diikuti oleh 12% Cina, 9% India, dan 5% Bumiputera bukan Melayu. Dari segi geografi, 64% responden tinggal di Selangor dan Kuala Lumpur.


Pekerjaan, corak pendapatan dan perbelanjaan kewangan

Majoriti responden bekerja dalam sesuatu kapasiti. 68% daripada responden adalah pekerja sepenuh masa, manakala 11% lagi bekerja sebagai pekerja sambilan, pekerja bebas atau usahawan; 2% adalah suri rumah sepenuh masa. Daripada mereka yang tidak bekerja, 7% sedang menganggur dan 12% masih belajar. (Rajah 1).

Rajah 1: Status pekerjaan

Berkenaan pendapatan semasa, selepas mengecualikan mereka yang masih belajar, 9% responden menyatakan bahawa mereka tidak mempunyai pendapatan bulanan tetap, 16% berpendapatan kurang daripada RM2,000 sebulan, dan 36% berpendapatan antara RM2,000 dan RM4,000 sebulan (Rajah 2). Secara keseluruhan, 61% responden berpendapatan di bawah RM4,000 sebulan.

Rajah 2: Pendapatan bulanan semasa

Majoriti responden, 67%, adalah pekerja yang masih dalam peringkat awal kerjaya mereka dengan pengalaman kerja 7 tahun dan ke bawah. 38% responden melaporkan bekerja kurang daripada 3 tahun, 29% bekerja antara 3-7 tahun, 11% bekerja 7-10 tahun, dan 22% bekerja lebih daripada 10 tahun (Rajah 3).

Rajah 3: Tahun pengalaman bekerja

Dari segi peningkatan pendapatan (sekali lagi selepas mengecualikan mereka yang masih belajar), 42% responden melaporkan tren pendapatan yang semakin meningkat – satu dapatan penting yang mencerminkan secara positif perkembangan kerjaya dan pulangan ke atas pendidikan tinggi. Walau bagaimanapun, terdapat 44% responden yang ketara melaporkan bahawa pendapatan mereka agak tidak berubah sejak mereka mula bekerja. Terdapat sebilangan minoriti yang melaporkan tren pendapatan yang membimbangkan: sekitar 10% melaporkan pendapatan tidak stabil, 2% melaporkan tiada pendapatan dan 3% melaporkan pendapatan menurun (Rajah 4). 

Rajah 4: Corak pendapatan responden

Kesan COVID-19 ke atas kelangsungan hidup para peminjam juga patut diberi perhatian: 52% responden melaporkan bahawa pandemik tidak memberi kesan kepada pendapatan mereka, manakala 13% menyaksikan pendapatan mereka meningkat dalam tempoh ini. Namun, di kalangan mereka yang pendapatannya telah terjejas, kerugian yang ditanggung adalah besar: 8% menyaksikan pendapatan mereka merosot sekurang-kurangnya 30%, dan 11% lagi hilang pekerjaan (Rajah 5).

Rajah 5: Kesan pandemik Covid-19 terhadap pendapatan

Majoriti kecil responden, 54%, mempunyai sekurang-kurangnya satu tanggungan kewangan seperti pasangan yang tidak bekerja, anak atau ibu bapa (Rajah 6).

Rajah 6: Bilangan tanggungan kewangan

Selain daripada pinjaman pendidikan, kira-kira 67% peminjam melaporkan mereka turut memberi bantuan kewangan kepada ibu bapa mereka. 45% daripada mereka mempunyai pinjaman kenderaan, dan 30% mempunyai hutang kad kredit untuk dibayar. 25% mempunyai pinjaman perumahan, dan 21% juga mempunyai pinjaman peribadi (Rajah 7).

Rajah 7: Jenis komitmen kewangan


Tujuan dan amaun pinjaman yang diambil

Sebilangan besar responden (74%) mengambil hanya satu pinjaman pendidikan, walaupun terdapat sejumlah responden yang mengambil dua pinjaman pendidikan (25%) dan sebahagian minoriti yang mengambil tiga pinjaman pendidikan (1%).

Rajah 8: Bilangan pinjaman pendidikan

Pinjaman tersebut kebanyakannya digunakan untuk membiayai ijazah sarjana muda, diikuti oleh pra-universiti dan diploma (Rajah 9).

Rajah 9: Peringkat kursus yang dibiayai oleh pinjaman pendidikan

Majoriti responden belajar di institusi pengajian tinggi awam (IPTA) berbanding institusi pengajian tinggi swasta (IPTS) dan institusi luar negara. Bagi mereka yang belajar di luar negara, lazimnya ia adalah untuk kursus ijazah dan pensijilan profesional/teknikal (Rajah 10).

Rajah 10: Jenis institusi yang dibiayai pinjaman mengikut peringkat kursus

Menariknya, amat ramai responden yang berjaya menamatkan program pengajian mereka (88%). Hanya 2% sahaja yang gagal menamatkan program mereka manakala baki 10% responden masih belajar (Rajah 11).

Rajah 11: Kadar tamat pengajian

Dari segi penyedia pinjaman, PTPTN merupakan sumber terbesar pinjaman pendidikan. 82% responden melaporkan bahawa mereka meminjam daripada PTPTN, diikuti oleh 14% daripada MARA dan 8% daripada kerajaan negeri (Rajah 12).

Rajah 12: Sumber pinjaman pendidikan

Dari segi amaun pinjaman, 82% responden meminjam kurang daripada RM60,000. Ini adalah konsisten dengan purata saiz pinjaman yang dinyatakan oleh pengerusi PTPTN sebelum ini. 10% responden meminjam kurang daripada RM15,000, 41% meminjam antara RM15,001 hingga RM30,000, manakala 31% lagi meminjam antara RM30,001 hingga RM60,000; terdapat 7% responden yang meminjam lebih daripada RM100,000 (Rajah 13).

Rajah 13: Amaun pinjaman pendidikan

Dari segi tempoh masa untuk membayar balik pinjaman pendidikan mereka (mengikut perjanjian pinjaman), 34% responden menyatakan bahawa mereka perlu membayar balik dalam tempoh 5-10 tahun dan 34% lagi menyatakan mereka perlu membayar dalam tempoh 10-20 tahun. 16% melaporkan bahawa mereka perlu membayar hutang mereka dalam tempoh 20-30 tahun dan baki 8% melaporkan bahawa mereka akan mengambil masa lebih daripada 30 tahun untuk membayar balik pinjaman pendidikan mereka (Rajah 14). Untuk rekod, PTPTN membenarkan para peminjam menstruktur semula pinjaman mereka dan ini membolehkan peminjam untuk memanjangkan tempoh bayaran balik sehingga mereka mencapai umur 60 tahun.

Rajah 14a: Tempoh pinjaman pendidikan

Rajah 14b: Tempoh pinjaman pendidikan mengikut amaun pinjaman

Bayaran bulanan peminjam bergantung pada saiz pinjaman dan tempoh pembayaran balik mereka. Majoriti besar responden, 72%, membayar antara RM100 dan RM300 sebulan. Secara spesifiknya, 8% membayar kurang daripada RM100 sebulan, 45% responden membayar antara RM100 dan RM200 sebulan, 27% membayar antara RM200 dan RM300 sebulan, 11% membayar antara RM300 dan RM400 sebulan, 5% membayar antara RM 400 dan RM 500 sebulan, dan 4% membayar lebih daripada RM500 sebulan (Rajah 15).

Rajah 15: Bayaran balik pinjaman bulanan

Perkara ini tidak menjadi masalah apabila pendapatan peminjam sepadan dengan bayaran bulanan dan jumlah hutang mereka; secara amnya peminjam dengan ansuran pinjaman bulanan yang tinggi cenderung memperoleh pendapatan yang lebih tinggi (Rajah 16). Walau bagaimanapun, terdapat segmen graduan yang berpendapatan kurang daripada RM2,000 atau tiada pendapatan yang menghadapi cabaran membuat bayaran bulanan. Hairannya, dalam kalangan kumpulan berpendapatan tinggi (lebih daripada RM7,000 sebulan), sebanyak 38% daripada mereka hanya membayar RM200 atau ke bawah. Dapatan ini boleh menyokong cadangan kami untuk menetapkan amaun bayaran balik berdasarkan pendapatan peminjam.

Rajah 16: Bayaran balik pinjaman bulanan mengikut pendapatan

41% daripada responden pernah berunding untuk menstruktur semula pembayaran balik pinjaman mereka sekurang-kurangnya sekali – jumlah yang agak tinggi. Semakin besar saiz pinjaman mereka, semakin besar kemungkinan peminjam akan menstruktur semula pembayaran balik pinjaman mereka. Kira-kira 75% daripada responden yang meminjam lebih daripada RM100,000 menyusun semula pembayaran pinjaman mereka, diikuti oleh 46% daripada mereka yang meminjam antara RM60,001 hingga RM100,000, 40% daripada mereka yang meminjam antara RM30,001 hingga RM60,000, 40 % daripada mereka yang meminjam antara RM15,001 hingga RM30,000, dan hanya 20% di kalangan mereka yang meminjam kurang daripada RM15,000 (Rajah 17).

Rajah 17: Penstrukturan semula pinjaman mengikut amaun pinjaman

Dari segi pendapatan, agak mengejutkan apabila terdapat lebih ramai responden dalam kalangan kumpulan berpendapatan tertinggi yang menstruktur semula pinjaman mereka (49% antara mereka yang memperoleh lebih daripada RM7,000 sebulan) berbanding kumpulan berpendapatan terendah (26% antara mereka yang berpendapatan kurang daripada RM2,000 sebulan) (Rajah 18)*. Ini mungkin disebabkan oleh dua perkara: mereka yang berpendapatan tinggi lebih mampu untuk mengambil kesempatan diskaun PTPTN untuk membuat pembayaran balik dalam jumlah yang besar lalu menstruktur semula untuk menyelesaikan pinjaman mereka dengan lebih cepat, manakala mereka yang berpendapatan rendah lebih berkemungkinan lalai (defaulted) berbanding menstruktur semula pinjaman mereka.

*Corak ini juga berlaku apabila kita membandingkan kumpulan pendapatan kedua tertinggi dan kumpulan pendapatan kedua terendah. Pengecualian adalah mereka yang tidak melaporkan pendapatan bulanan – kira-kira 50% daripada mereka menstruktur semula pinjaman mereka.

Rajah 18: Penstrukturan semula pinjaman mengikut pendapatan

Dari segi kadar pembayaran balik, yang sering menjadi isu hangat yang mencetuskan naratif berita yang berbeza, tinjauan kami selari dengan kenyataan PTPTN sebelum ini: walaupun terdapat sebahagian minoriti peminjam yang lalai, majoriti membayar balik pinjaman mereka. 60% daripada responden boleh dikategorikan sebagai mereka yang berada pada kedudukan yang baik kerana mereka sama ada telah membayar balik pinjaman mereka sepenuhnya atau sedang membayar secara konsisten seperti yang dijadualkan dalam perjanjian mereka. 20% boleh dikategorikan sebagai peminjam yang membayar secara tidak konsisten dan 8% boleh dikategorikan sebagai penghutang lalai yang tidak pernah membayar balik pinjaman mereka. Baki 12% daripada responden belum dijadualkan untuk memulakan pembayaran balik (Rajah 19).

Rajah 19: Status bayaran balik

Melihat corak penghutang lalai dengan lebih mendalam, dapatan kami sebahagian besarnya menyokong tinjauan PTPTN yang terdahulu (disebutkan dalam penerbitan ini) bahawa kebanyakan penghutang lalai cenderung datang daripada kumpulan berpendapatan rendah. Bagi mereka yang membuat pembayaran tidak konsisten, 46% melaporkan tidak mempunyai pendapatan semasa atau berpendapatan kurang daripada RM2,000 sebulan manakala 29% lagi memperoleh antara RM2,000 dan RM4,000 sebulan. Bagi mereka yang tidak pernah membuat pembayaran balik, 36% melaporkan tiada pendapatan bulanan pada masa ini dan 32% lagi berpendapatan kurang daripada RM2,000 sebulan. Namun begitu, terdapat juga sebahagian daripada mereka yang membuat pembayaran tidak konsisten yang datang dari kumpulan berpendapatan tinggi: 14% memperoleh pendapatan antara RM4,000 dan RM7,000 sebulan, dan 12% lagi daripada mereka memperoleh lebih daripada RM7,000 sebulan (Rajah 20).

Rajah 20: Status bayaran balik mengikut pendapatan

Untuk lebih memahami motivasi di sebalik tindakan mereka membayar atau tidak membayar balik pinjaman mereka, kami meminta responden supaya menanda beberapa kenyataan yang menjelaskan tindakan mereka. Tiga sebab utama yang dilaporkan mengapa peminjam yang berada pada kedudukan baik membayar pinjaman mereka adalah: mereka berasa bertanggungjawab untuk membayar hutang mereka (94%), mereka tidak suka berhutang (93%), dan mereka ingin mengelakkan penalti (87%) (Rajah 21).

Rajah 21: Motivasi untuk pembayaran balik yang konsisten

Dalam kalangan mereka yang tidak membayar balik atau membayar secara tidak konsisten, tiga sebab utama yang dilaporkan mengapa mereka berbuat demikian adalah: mereka tidak mempunyai pendapatan yang cukup untuk menampung kos sara hidup dan tanggungan yang lain (75%), mereka sedang menunggu menunggu pengumuman atau janji pilihan raya untuk mengurangkan hutang pinjaman atau bayaran balik (73%), dan mereka percaya adalah tidak adil untuk membayar kos sebanyak ini untuk pendidikan tinggi (71%) (Rajah 22).

Rajah 22: Motivasi untuk pembayaran yang tidak konsisten / lalai

Pendapatan peminjam yang merupakan “Pelajar Generasi Pertama” berbanding kumpulan yang lain

59% responden dikenal pasti sebagai graduan generasi pertama. Maksudnya, kedua-dua ibu bapa mereka tidak memiliki ijazah universiti dan mereka adalah yang pertama dalam keluarga mereka yang berjaya menamatkan pengajian tinggi. Walaupun ini membuktikan bahawa pinjaman pendidikan tinggi memanfaatkan pelajar generasi pertama dan membolehkan mereka melanjutkan pengajian tinggi, mereka didapati memperoleh pendapatan yang lebih rendah, sebagai satu kumpulan, berbanding peminjam yang bukan merupakan pelajar generasi pertama (iaitu mereka yang mempunyai ibu bapa berkelayakan pendidikan tinggi.).

Lebih ramai responden daripada generasi pertama yang berpendapatan kurang daripada RM2,000 sebulan (20%) berbanding responden yang bukan generasi pertama (11%). Terdapat juga lebih ramai responden generasi pertama yang melaporkan tidak mempunyai pendapatan bulanan pada masa ini berbanding responden bukan generasi pertama. Ringkasnya, walaupun pencapaian pendidikan tinggi adalah penting, kelayakan pendidikan ibu bapa juga merupakan salah satu faktor penentu kepada keupayaan pendapatan peminjam.

Rajah 23: Pendapatan peminjam generasi pertama berbanding kumpulan lain

Kesan dan persepsi terhadap pinjaman pendidikan

Selain profil dan pinjaman mereka, kami juga bertanya kepada responden bagaimana mereka melihat nilai pinjaman pendidikan, kesan pinjaman pendidikan terhadap kedudukan kewangan mereka dan sama ada dasar pinjaman pendidikan hari ini perlu diteruskan atau diubah. 

Apabila kami bertanya kepada responden sama ada mereka merasakan pendidikan atau kelayakan yang mereka terima berbaloi dengan kos pinjaman pendidikan, majoriti 59% melaporkan bahawa ia berbaloi (Rajah 24). Kira-kira 22% berasa neutral dan baki 20% berpandangan bahawa ia tidak berbaloi.

Rajah 24: Persepsi nilai pendidikan berbanding pinjaman pendidikan

Apabila kami meneliti data tersebut mengikut corak pendapatan, mereka yang berpendapatan rendah lebih cenderung melaporkan bahawa pendidikan tinggi mereka tidak berbaloi dengan hutang pinjaman yang ditanggung berbanding mereka yang berpendapatan tinggi. Peminjam yang berpendapatan kurang daripada RM2,000 sebulan atau tidak mempunyai pendapatan bulanan pada masa ini lebih berkemungkinan melaporkan bahawa pendidikan mereka tidak berbaloi dengan hutang pinjaman pendidikan yang ditanggung berbanding dengan responden yang berpendapatan lebih tinggi (Rajah 25).

Rajah 25: Persepsi nilai pendidikan mengikut pendapatan

Apabila kami membandingkan persepsi nilai pendidikan mengikut jenis institusi untuk ijazah sarjana muda – peringkat kursus paling popular di kalangan responden kami – kami mendapati mereka yang berada di institusi pengajian tinggi awam (IPTA) tempatan lebih berkemungkinan melaporkan bahawa pendidikan mereka berbaloi dengan pinjaman pendidikan berbanding dengan rakan sebaya mereka di institusi pengajian tinggi swasta (IPTS) tempatan. Mereka yang mengambil pinjaman untuk membiayai kursus ijazah sarjana muda di IPTS juga cenderung sedikit untuk menyatakan bahawa pendidikan mereka tidak berbaloi dengan hutang pinjaman. Satu lagi dapatan menarik adalah mereka yang belajar di institusi pengajian tinggi luar negara lebih cenderung untuk melaporkan bahawa pendidikan mereka berbaloi dengan pinjaman berbanding dengan mereka yang belajar di institusi pengajian tinggi tempatan.

Rajah 26: Persepsi nilai pendidikan mengikut jenis institusi pendidikan (ijazah sarjana muda sahaja)

Agak memeranjatkan, jumlah responden yang melaporkan pernah dikenakan penalti pinjaman adalah sedikit rendah (Rajah 27). Hanya 11% mengatakan mereka pernah tidak dapat melakukan perjalanan ke luar negara kerana disenaraihitamkan oleh imigresen selepas tidak membayar balik pinjaman pendidikan mereka. 4% melaporkan pernah disaman kerana tidak membayar balik pinjaman pendidikan, dan 2% lagi melaporkan bahawa mereka pernah diisytiharkan muflis oleh mahkamah kerana tidak membayar balik pinjaman pendidikan mereka. 24% melaporkan kesukaran mendapatkan pinjaman bank kerana status pembayaran balik pinjaman pendidikan mereka menjejaskan skor kepercayaan kredit mereka.

Rajah 27: Penalti yang dihadapi oleh peminjam

Untuk lebih memahami impak berbeza hutang pinjaman pendidikan terhadap kehidupan peminjam, kami bertanya kepada responden tentang kesan pinjaman tersebut terhadap kedudukan kewangan dan rancangan kehidupan mereka. 59% melaporkan bahawa pinjaman pendidikan telah menyumbang kepada tekanan kewangan, 57% melaporkan bahawa pinjaman pendidikan menyumbang kepada kelewatan dalam pembelian rumah, dan 52% melaporkan bahawa pinjaman pendidikan menyumbang kepada mereka menangguhkan simpanan, termasuk simpanan kecemasan dan simpanan persaraan (Rajah 28). 46% daripada responden melaporkan bahawa pinjaman pendidikan telah menyumbang kepada mereka tidak memulakan perniagaan atau mengusahakan sesuatu yang berisiko, manakala 42% melaporkan bahawa pinjaman pendidikan telah menyumbang kepada mereka menangguhkan perkahwinan atau memulakan keluarga (iaitu mendapatkan zuriat).

Rajah 28: Kesan pinjaman pendidikan terhadap rancangan kehidupan

Kami juga bertanya pendapat responden tentang beberapa idea untuk memperbaharui dasar pinjaman pendidikan. Pendapatan kewangan adalah tema yang sering ditekankan oleh para responden. 82% responden bersetuju bahawa hutang pinjaman pendidikan tidak menjadi masalah sekiranya graduan mendapat gaji yang lebih tinggi. Sehubungan itu, terdapat sokongan padu daripada responden, 81%, untuk memulakan pembayaran balik pinjaman pendidikan hanya selepas peminjam mencapai tahap pendapatan yang berpatutan – ini adalah salah satu cadangan dasar yang kami anjurkan dalam Bahagian 2 siri kajian ini. Lebih daripada dua pertiga responden, 77%, bersetuju bahawa peminjam yang kurang bernasib baik dan terbeban wajar mendapat pengampunan bagi sebahagian daripada hutang pinjaman pendidikan mereka – cadangan yang juga kami usulkan sebelum ini.

Rajah 29: Sokongan untuk pembayaran balik berasaskan pendapatan dan pengampuan sebahagian hutang pinjaman

Cadangan dasar untuk mengenakan lebih banyak pengawalan ke atas pinjaman pendidikan tidak dipersetujui oleh responden – ini bertentangan dengan idea kami berkenaan hal ini. Majoriti responden tidak bersetuju bahawa kriteria untuk pinjaman pendidikan perlu diperketatkan dan diberikan untuk kursus tertentu sahaja (69%) atau institusi tertentu sahaja (71%), yang merupakan dua daripada cadangan-cadangan dasar yang kami usulkan dalam Bahagian 3 siri kajian ini. Sebilangan kecil responden juga memberi reaksi negatif terhadap pengesyoran dasar kami bahawa jumlah pinjaman pendidikan untuk ijazah universiti tradisional perlu dikurangkan, dan lebih banyak lagi untuk kursus teknikal dan atas talian termasuk kelayakan mikro (52% tidak bersetuju). Walau bagaimanapun, kajian lanjutan yang merangkumi sampel yang lebih representatif, termasuk lebih ramai graduan TVET, mungkin akan menjana pandangan yang kurang condong ke arah pemilikan ijazah tradisional.

Rajah 30: Sokongan untuk cadangan pembaharuan dasar pinjaman

77% responden bersetuju bahawa belia tidak patut perlu berhutang untuk mencapai pendidikan tinggi, dan majoriti yang lebih besar, 82%, berkata golongan miskin tidak sewajarnya perlu berbuat demikian. Majoriti responden, 59%, tidak bersetuju dengan kenyataan bahawa seseorang individu atau keluarga bertanggungjawab sepenuhnya untuk menabung dan membiayai pengajian tinggi mereka sendiri. Mungkin dalam kajian akan datang, boleh dilihat sama ada peminjam merasakan bahawa keluarga harus bertanggungjawab untuk membayar sebahagian kos pendidikan tinggi.

Rajah 31: Pandangan mengenai pembiayaan pendidikan tinggi

Mengenai persoalan kemampuan fiskal, kira-kira dua pertiga daripada responden, 69%, berpendapat bahawa negara mampu untuk menyediakan pendidikan tinggi percuma untuk semua orang (Rajah 32). Pada pandangan kami, ini mencerminkan jurang antara pembuat dasar (yang cenderung lebih berhati-hati/konservatif dari segi fiskal) dengan pandangan masyarakat umum.

Rajah 32: Pandangan tentang kemampuan kerajaan menyediakan pendidikan tinggi percuma

Walau bagaimanapun, ramai responden tidak mengetahui bagaimana PTPTN – penyedia pinjaman pendidikan terbesar di negara – beroperasi (Rajah 33). Hanya 39% menyedari bahawa PTPTN meminjam daripada institusi kewangan dan pasaran kewangan. Lebih dua pertiga daripada responden, 77%, mengandaikan bahawa PTPTN dibiayai sepenuhnya oleh kerajaan dan pembayar cukai, dan hanya 36% sedar bahawa kerajaan Malaysia menjamin hutang yang ditanggung oleh PTPTN. Kira-kira 40% mengandaikan bahawa PTPTN dibiayai sepenuhnya oleh kutipan pinjaman (Kami telah membincangkan bagaimana PTPTN beroperasi dalam Bahagian 1.).

Rajah 33: Pengetahuan tentang operasi pembiayaan PTPTN

Kesimpulan

Kami memulakan siri kajian ini dengan menggariskan beberapa masalah utama yang berbangkit apabila pinjaman pendidikan menjadi tonggak utama dasar pembiayaan pendidikan tinggi bagi rakyat Malaysia. Seperti yang telah dinyatakan sebelum ini, isu utama ialah pulangan dari pendidikan tinggi yang tidak diagihkan secara sama rata. Ini dibuktikan oleh tinjauan kami yang mendapati lebih daripada separuh responden berpendapatan RM4,000 sebulan dan ke bawah.

Disebabkan pulangan tidak sekata daripada pendidikan tinggi, kami membuat hipotesis bahawa graduan kini makin mempersoalkan nilai pendidikan tinggi mereka berbanding dengan kos hutang pinjaman pendidikan. Ini sedikit sebanyak disokong oleh tinjauan ini, di mana hanya majoriti kecil responden, 59%, bersetuju bahawa pendidikan mereka berbaloi dengan pinjaman yang ditanggung. Peminjam yang berpendapatan lebih rendah (kurang daripada RM2,000 sebulan) berkemungkinan besar mempersoalkan nilai pendidikan tinggi mereka. 

Kami menguji andaian kami yang lain mengenai aspek berkaitan seperti tingkah laku pembayaran balik pinjaman, tahap penstrukturan semula pinjaman, kesan pinjaman pendidikan terhadap tekanan kewangan dan rancangan kehidupan peminjam, serta sejauh mana pengetahuan peminjam tentang cara PTPTN dibiayai; Kesemua ini diringkaskan dalam Jadual 1 di bawah. Walaupun kebanyakan andaian kami mengenai impak pinjaman pendidikan terhadap situasi kewangan peminjam telah disahkan, beberapa dapatan tidak senegatif/seteruk yang kami jangkakan.

Jadual 1: Andaian yang diuji dan petunjuk daripada tinjauan

Selain daripada andaian di atas, kami juga menguji pandangan peminjam terhadap perspektif dasar kami (Jadual 2). Beberapa pengesyoran dasar kami tidak disenangi para peminjam. Contohnya dalam Bahagian 3, kami telah menganjurkan pengetatan  syarat dan pengehadan pinjaman pendidikan bagi kursus atau institusi tertentu yang mempunyai rekod prestasi yang terbukti, tetapi responden menolak cadangan ini dengan margin yang besar. Kami juga menyarankan untuk mengembangkan lebih banyak pinjaman pendidikan untuk kursus teknikal dan vokasional (TVET) dan mikrokredential tetapi responden kurang menyokong cadangan ini.

Walau bagaimanapun, cadangan-cadangan kami yang lain ternyata menarik perhatian dan sokongan para responden. Terdapat sokongan kukuh untuk membenarkan peminjam memulakan pembayaran balik hanya selepas mereka mencapai tahap pendapatan yang berpatutan, selari dengan idea untuk melaksanakan pembayaran balik berasaskan pendapatan. Responden juga menyokong pandangan dasar kami bahawa isi rumah berpendapatan rendah tidak harus perlu menanggung hutang untuk mencapai pendidikan tinggi – dan ini menunjukkan suatu kemahuan untuk pembaharuan dasar yang progresif. Cadangan dasar kami yang sejajar dengan visi sedemikian termasuklah menyediakan pengampunan separa pinjaman pendidikan yang bersasar untuk peminjam berpendapatan rendah serta pemberian subsidi terus, bukannya pinjaman, kepada pelajar daripada kumpulan berpendapatan rendah.

Jadual 2: Sokongan bagi cadangan dasar kami

Secara prinsipnya, sebarang keputusan untuk menambah baik dasar pembiayaan pendidikan tinggi harus dipandu oleh dua pemacu utama: pulangan sebenar pendidikan tinggi dan kemampanan struktur pembiayaan PTPTN. 

Mengakui dan mengenal pasti ketidaksamaan pulangan daripada pendidikan tinggi akan membantu kita untuk bergerak ke arah dasar yang (i) benar-benar membantu untuk menyamakan peluang dan kedudukan untuk pelajar daripada isi rumah berpendapatan rendah, dan (ii) mengagihkan sokongan sumber dan jaminan kualiti yang berpatutan kepada pendidikan berterusan yang tidak tradisional seperti TVET dan mikrokredential.

Kesedaran struktur jangka panjang pembiayaan PTPTN yang kurang mampan akan membantu kerajaan untuk menetapkan laluan ke arah dasar yang (iii) beralih daripada kebergantungan pada hutang pinjaman ke arah  inisiatif subsidi/tabungan simpanan untuk pembelajaran sepanjang hayat setiap rakyat Malaysia, dan (iv) menginstitusikan lebih banyak nilai ketelusan, akauntabiliti dan pengawasan dalam badan pembiayaan seperti PTPTN.

Mengambil kira perubahan ketara yang kian berlaku dalam dunia pekerjaan dan pendidikan tinggi, kami percaya bahawa sudah tiba masanya untuk lebih banyak penggubalan dasar – yang berasaskan bukti dan kajian – dibuat untuk mengkaji semula pinjaman pendidikan sebagai instrumen dasar. Dengan pilihan raya umum yang semakin menjelang tiba, kami berharap untuk melihat dan menilai pelbagai cadangan dasar dan pemikiran baru yang memandang ke hadapan daripada parti-parti politik mengenai topik yang sangat penting ini.

Thinking about reskilling? Here’s what you need to know

Skills development is central in adapting to changing labour demand amidst broad economic and social changes. The Malaysian government has given skills development ample emphasis going all the way back from the First Malaysia Plan. In the last three years, the government has poured an average of RM19 billion on various reskilling schemes every year, an amount equivalent to 5-6% of the annual budget (Figure 1).

Figure 1: Malaysia’s Budget Allocation for Reskilling, 2020-2022

To promote reskilling, this primer aims to tell you the nuts and bolts of the skills development system in Malaysia. For those contemplating to reskill themselves, this primer is also intended to act as a handy FAQ to guide you through the reskilling maze.

What is skills development?

The UNESCO International Centre for Technical and Vocational Education and Training (UNESCO-UNEVOC) defines the term ‘skills development’ as “the development of skills or competencies which are relevant to the workforce”. According to the Industrial Skills Framework by the Human Resources Development Corporation (HRD Corp), there are three types of skills: knowledge, skills and competence.

Definitions for Different Types of Skills

Knowledge: Understanding of theories and principles in a field of work
Skills: Cognitive, practical and soft skills required to accomplish tasks and solve problems in a domain area
Competence: Ability to operate within unknown contexts, supervise professional development of individuals and groups, and manage complex technical or professional assignments

Source: HRD Corp

Conventionally, skills development in Malaysia refers to technical and vocational education and training (TVET). In recent years, policymakers and the media have adopted a more expansive definition of skills development to include ‘reskilling’ and ‘upskilling’, reflecting rapid changes in the labour market and the need to take up skills development throughout one’s career.

Definition of ‘Upskilling’ and ‘Reskilling’

Upskilling refers to learning new skills to meet the changing job demands for a current role or career advancement;
Reskilling refers to learning new sets of skills for transiting to a completely new job or new industry.

Source: World Economic Forum

Reskilling pathways in Malaysia

Malaysia’s skills development system was first established in 1964. Over the decades, the government has progressively added various training institutions, course programmes and subsidy schemes to support the reskilling of different target groups. Today, whether you are a secondary school leaver or a working adult, there are several ways to seek reskilling without necessarily undertaking the traditional academic pathway (Figure 2).

Figure 2: Skills Development Pathways in Malaysia

Source: Strategy Paper 9 – Transforming Technical and Vocational Education and Training to Meet Industry Demand, 10th Malaysia Plan and UNESCO-UNEVOC International Centre

The pathways that we explain below are those that are accredited by the Malaysian government. But first, we would like to note that for non-accredited courses, there are massive online open courses offered by platforms such as Coursera, Data Camp and Udemy. Because these courses and platforms do not have formal accreditation from regulatory agencies in Malaysia, it is up to individual employers to decide whether to recognise them as proof of qualification or competency.

Depending on your learning preference, you can either sign up for programmes accredited by the Department of Skills Development (DSD) under the Human Resources Ministry or the Malaysian Qualifications Agency (MQA) under the Higher Education Ministry. DSD-certified programmes have a stronger emphasis on practical industrial training whereas MQA-accredited courses focus more on classroom-based learning. Since both agencies now follow the same accreditation standards set by the Code of Practice for TVET Programme Accreditation (COPTPA), you will have the option to continue pursuing tertiary education regardless of whether you graduate from DSD- or MQA-approved programmes.

Currently, there is a myriad of training institutions and programmes available to choose from. According to the 2018 TVET Report, there are 556 public training institutions and 692 private training institutions spread across 7 ministries and 17 agencies. 

There are varying types of skills courses, including employability skills training, occupational standards certification programmes, PPP (Problem, Project, Production)-based learning and entrepreneurship programmes for different industries. Figure 3 below illustrates Malaysia’s skills development landscape.

Figure 3: Skills training institutions by ministries

Source: Strategy Paper 9 – Transforming Technical and Vocational Education and Training to Meet Industry Demand, 10th Malaysia Plan.

Note: The number attached to each box represents the number of institutions under the respective agency. Although the information above was published in 2016, there has not been a major change in the structure of Malaysia’s skills development landscape since then, except additions in new training institutions. Thus, figure 3 remains the latest public document depicting the Malaysian skills development system.

In recent years, the government has also provided a wide variety of opportunities for Malaysian citizens to learn new skills remotely. Several ministries and agencies have established digital learning platforms to host online reskilling courses, including Upskill Malaysia, e-LATIH by HRD Corp and Digital Skills Training Directory by MDEC. Most recently in April 2022, the HRD Corp partnered with the Higher Education Ministry to launch a micro-credential initiative to offer industry-recognised courses.

Sources of financial support

There are several sources of financial support from which you can apply to fund your reskilling programmes. Depending on the type of programme, you can apply for a low-interest loan either from the Skills Development Fund Corporation (PTPK) or the National Higher Education Fund Corporation (PTPTN) (Figure 4). However, these reskilling loans are only applicable to the accredited programmes offered by public and private training institutions, excluding non-accredited skills courses.

Figure 4: Types of Skills Training Loans

If you do not want to borrow and incur debt, you can apply for partial withdrawal of your EPF retirement savings (if you or your parents have one) to pay for reskilling courses. Otherwise, the government also provides financial support for reskilling to worker segments via HRD Corp and the Employment Insurance System (EIS) under SOCSO.

If you are a formal employee, you could request your employers to apply for training subsidies and allowances from multiple HRD Corp programmes, provided that your employers are registered HRD Corp contributors. Meanwhile, there are also subsidised HRD Corp initiatives for various target groups, including B40 individuals, school leavers below 40 years old with or without school certificates, unemployed graduates and retrenched workers. If you are an unemployed EIS contributor, you can access EIS financial assistance that provides a training subsidy of up to RM4,000 and an allowance of RM10-20 a day to reskill and gain new income opportunities.

However, not everyone can access the funding options on offer. As pointed out in our 2020 survey on delivery riders, it is not straightforward for those in need of reskilling to apply for the available financial support.

Conclusion

As highlighted in the 12th Malaysia Plan, the government plans to prepare the Malaysian workforce for the future of work. In addition, Malaysia has committed to achieve the Fourth United Nations Sustainable Development Goal, which calls for substantially increasing the number of workers with relevant skills by 2030. To attain these goals, the government has set up a National TVET Council in 2021 for tackling systemic problems mentioned in the 2018 TVET Report, such as fragmented and uncoordinated programs, underutilisation of training facilities, and the mismatch between the skills supply and industrial demand.

The skills development landscape in Malaysia has grown exponentially in the past six decades. Skills development is no longer confined to a segment of school leavers and the less academically-inclined. Today, skills development matters to millions of workers who seek to change or advance their careers and secure their livelihoods. In order to adapt to the evolving labour market demands and technological trends, reskilling and upskilling are becoming essential for many Malaysian workers. If you are one of them, we hope this primer has helped to provide you with an overview of the reskilling landscape in Malaysia as a starting point to guide you in making further enquiries.

Have you tried to reskill or upskill yourself with any of the options mentioned above? How was your experience? We would love to hear from you. Email us at editorial@centre.my.

Bilakah Penggunaan Hukuman Mati akan Diubah di Malaysia?

Hukuman mati sekali lagi menjadi tumpuan perbincangan awam pada akhir tahun lepas setelah video Hairun Jalmani tular di media sosial. Berusia 55 tahun, ibu tunggal kepada sembilan anak itu telah dijatuhkan hukuman mati di bawah Seksyen 39(B) Akta Dadah Berbahaya berikutan sabitan kesalahan pada tahun 2018. Hairun, yang menyatakan bahawa dia tetap tidak bersalah, telah dijumpai oleh polis di dalam sebuah bilik bersama 113.9g metamfetamin – jumlah yang bersamaan kurang daripada satu cawan.

Video tangisan Hairun setelah dijatuhkan hukuman yang telah dikongsi secara meluas itu telah mencetuskan semula gesaan supaya hukuman mati dimansuhkan di Malaysia. Namun begitu kes Hairun bukanlah sesuatu yang baru. Sehingga September 2021, lebih daripada 1,300 orang sedang menunggu untuk menjalani hukuman mati. Kira-kira 75% daripada mereka telah didapati bersalah di bawah Seksyen 39(B) Akta Dadah Berbahaya. Sebahagian besar daripada mereka adalah penagih, keldai dadah atau penjual kecil-kecilan dan bukannya dalang di sebalik pengedaran dadah secara besar-besaran.

Untuk perspektif, seseorang hanya perlu memiliki atau ditemui berada berdekatan dengan 50g metamfetamin (atau syabu) untuk dibicarakan sebagai pengedar dadah serius dan disabitkan dengan hukuman mati.

Penulisan yang mempersoalkan keberkesanan undang-undang dadah yang ketat di Malaysia dan kesannya yang tidak proporsional ke atas golongan yang rentan telah banyak disajikan untuk bacaan masyarakat. Oleh itu, desakan untuk memansuhkan hukuman mati boleh difahami. Ia bagaimanapun menimbulkan perbezaan pendapat yang ketara. Setelah Hairun dijatuhkan hukuman, suara-suara yang memanggil ke arah pemansuhan hukuman mati daripada tokoh-tokoh awam seperti Prof Datuk Dr Adeeba Kamarulzaman dan Ahli Parlimen Muar Syed Saddiq Syed Abdul Rahman telah ditentang oleh pelbagai kumpulan, daripada warga maya kepada tokoh-tokoh lain.

Perbezaan pandangan berkenaan hukuman mati ini tidaklah memeranjatkan. Tinjauan-tinjauan oleh media atas talian sebelum ini secara relatifnya telah menunjukkan tahap sokongan yang tinggi untuk mengekalkan hukuman mati; malah tinjauan sampel representatif (Semenanjung Malaysia) yang kami jalankan pada tahun 2019 mendapati bahawa majoriti kecil rakyat Malaysia, iaitu 60%, berpendapat bahawa hukuman mati adalah suatu keperluan. Kebanyakan daripada mereka percaya bahawa hukuman mati mempunyai kesan mencegah.

Walau bagaimanapun, kajian yang sama juga menunjukkan bahawa sokongan terhadap hukuman mati jatuh secara mendadak bergantung kepada jenis-jenis kesalahan yang dilakukan dan juga adanya faktor-faktor mitigasi. Bagi kesalahan pengedaran dadah kecil-kecilan, hanya 38% daripada responden representatif kajian menyokong hukuman mati.

Peratusan sokongan terhadap hukuman mati terus jatuh kepada 15% responden bilamana terdapat ketiadaan niat atau pengetahuan di pihak pelaku. Sokongan terhadap hukuman mati juga rendah bilamana terdapat keadaan-keadaan mitigasi, contohnya umur atau jantina – hanya 14% daripada responden kajian kami menyokong hukuman mati bagi kes seorang remaja yang dijumpai dengan 600g kanabis.

Pokoknya, pemansuhan hukuman mati secara mutlak adalah suatu saranan yang sukar untuk diterima buat masa ini. Ianya sangat mempolarisasikan, seperti yang dapat dilihat setiap kali isu ini timbul. Walau bagaimanapun, kajian kami berkenaan pendapat rakyat Malaysia tentang hukuman mati menunjukkan bahawa reformasi penghukuman boleh membawa impak yang lebih besar. Terdapat kemahuan di kalangan rakyat Malaysia untuk sekurang-kurangnya memansuhkan hukuman mati mandatori: bahkan, daripada 60% responden kami yang berpendapat bahawa hukuman mati adalah suatu keperluan dalam masyarakat, hanya 1% menyokong hukuman mati mandatori bagi semua senario kes tertentu yang kami timbulkan kepada mereka.

Namun, sekalipun reformasi penghukuman dilaksanakan, isu-isu yang lain tetap timbul. Sebagai contoh, limitasi atas pelaksanaan hukuman mati ke atas mereka yang datang dari kumpulan-kumpulan rentan masih kekurangan di Malaysia. Pada masa ini, hanya pesalah yang (i) di bawah umur 18 tahun, (ii) mengandung, atau (iii) mempunyai anak kecil dikecualikan dari hukuman mati. Masih belum ada larangan yang jelas berkenaan pelaksanaan hukuman mati ke atas pesalah yang mengalami isu kesihatan mental atau yang telah lanjut umur di Malaysia – bertentangan dengan syor Pertubuhan Bangsa-Bangsa Bersatu (PBB).

Undang-undang dadah yang ketat di Malaysia juga kurang mengambil kira faktor-faktor mitigasi seperti pengetahuan pelaku tentang jenayah yang dilakukan dan realiti sosioekonomi mereka yang dituduh. Walaupun pindaan kepada Akta Dadah Berbahaya pada tahun 2017 telah memperuntukkan budi bicara mahkamah dalam menjatuhkan hukuman mati (dengan beberapa syarat), mereka yang tidak mengetahui bahawa kandungan yang dibawa mereka berisi dadah dan mereka yang rentan berkemungkinan dipertanggungjawabkan pada tingkat yang sama dengan mereka yang menjual dadah dengan niat jenayah. Kajian oleh Monash University dan Anti-Death Penalty Asian Network (ADPAN) pada awal tahun lepas telah menunjukkan bahawa hanya 4 daripada 38 orang yang yang didapati bersalah atas tuduhan mengedar dadah di Malaysia antara Mac 2018 dan Oktober 2020 tidak dijatuhkan hukuman mati disebabkan penggunaan pindaan tersebut oleh mahkamah.

Sementara itu, fokus pada pelaku-pelaku ‘ikan bilis’ masih berterusan. Jabatan Siasatan Jenayah Narkotik (JSJN) Bukit Aman pada tahun lepas telah mencadangkan untuk mengurangkan berat ambang bagi kesalahan pengedaran dadah. Cadangan ini telah mendapat sokongan daripada pengerusi Ikatan Komuniti Selamat, Tan Sri Lee Lam Thye, yang telah menyarankan agar ia dibentangkan di Dewan Rakyat secepat mungkin. Jika diluluskan, cadangan ini berpotensi untuk menyebabkan hukuman mati digunakan dengan lebih meluas, melainkan reformasi penghukuman dilaksanakan.

Namun begitu, kedua-dua kerajaan Pakatan Harapan dan Perikatan Nasional telah menyatakan niat untuk menggantikan hukuman mati dengan hukuman penjara minimum bagi kesalahan pengedaran dadah di Malaysia. Menteri Dalam Negeri Dato’ Seri Hamzah Zainudin juga telah mengumumkan pada tahun lepas bahawa kerajaan sedang mempertimbangkan untuk membenarkan penggunaan ganja perubatan – suatu pandangan yang mungkin telah disebabkan oleh bantahan awam terhadap kes ‘Dr. Ganja’ dan lain-lain yang seumpamanya.

Di sebalik mesej-mesej yang bercanggah, terdapat tanda-tanda bahawa para penggubal dasar telah bersedia untuk perubahan. Persoalannya adalah, berapa ramai lagi seperti Hairun yang perlu menunggu sehingga perubahan-perubahan yang telah lama tertangguh ini dilaksanakan?

Stories from an Indebted Generation

In our four-part Indebted Generation research series, we addressed the quandary of student debt and recommended some key policy changes towards resolving problems related to current outstanding loans as well as longer term systemic issues with how higher education is financed in Malaysia. We also highlighted the declining – and increasingly less secure – returns of higher education in a labour market which is today beset with stagnant wages and underemployment. These developments are making a sizeable number of borrowers question the worth of their tertiary education relative to their student loans.

To better understand their views on student loan and its impact on their lives, we conducted a survey among borrowers last year. Among the survey’s findings was the split reaction among respondents about the worth of their education that were paid for via student loans: 59% agreed that it was worth the loans incurred, while 41% disagreed. Borrowers whose income is lower than RM2,000 a month were especially likely to question the worth of their education. We found this mixed response interesting and followed up with several respondents through interviews and focus group discussions. In this illustrated piece, we share a selection of what they told us about the factors that drove them to sign up for student loans, the challenges they face in repaying their loans, and the policy changes they hope to see with regard to higher education financing in Malaysia. 

* Some names mentioned in this piece are pseudonyms of the borrowers who participated in the interviews and focus group discussions. Quotes have been lightly edited for clarity and brevity.

Borrowers from low-income families tend to choose student loans as the default option to finance their higher education

Many student loan borrowers come from low-income households, a fact which is confirmed by both PTPTN’s survey as well as ours. When we asked about their family background during focus groups, some participants shared that they took up loans so that they did not have to burden their parents who were already struggling to make ends meet. 

“We were in the lower middle income. My father was the sole breadwinner. I can figure out that he was struggling to make an allocation to pay for our studies because me and my sister were going to university at around the same time. We have another three brothers growing up. So yeah we were struggling financially, and hence I decided to take up student loans to not add to that burden.” – Shima

“After matriculation, I received an offer for university. Finance was a big problem for me at the time because my family was B40. My mom was a housewife. My dad had this small business (restaurant), and siblings were all studying at the time. I opted for PTPTN because I didn’t have much knowledge on scholarships either. I also took PTPTN loans for my master’s degree. So the total loan is around RM 43,000 plus interest.” – Hafizah

“The combination of unmet higher earnings potential and the burden of student debt seems to impact B40 borrowers disproportionately. PTPTN’s own study revealed that 97% of the loan defaulters surveyed were from the B40 income group. Defaulters cited high debt obligations and low income as the primary reasons for their non-payment.” – Indebted Generation, Part 1

Low-income students lack the know-how to access financial aid opportunities

We also found from the interviews and focus groups that students from low-income families lack awareness regarding scholarship and financial aid opportunities when it comes to tertiary education. Their parents do not know how to guide them since they did not attend university and had no knowledge of the process. Even when the students are aware of such opportunities, they lack the know-how, and in some cases, rule themselves out of applying because of low self-confidence and perceived inadequate results. Some borrowers shared that if they had known more about scholarship and financial aid opportunities, they would not have taken up the loans.

“I wasn’t the brightest student, and I did not know that many scholarships options. No one taught me to look at scholarships offered by MARA and state governments. On the first day of my foundation (asasi) registration, we were already given documents for student loan applications. “You just need to sign,” they said to us. After taking out the loan, I feel cheated because actually we have to pay back more. Nobody mentioned to me about the interest rate and I was not aware of how it is calculated. Now I tell people that if they can do part time jobs or apply for scholarships, just do it and refrain from getting PTPTN loans. I did that for my younger brother as when he wanted to pursue higher education, we knew better options already and applied for various things, like zero-interest financing by state governments. He didn’t take a PTPTN loan.” – Shima

“My parents did not know how to advise me about college because they didn’t get to attain tertiary education. What happened was I got good SPM results, then by chance there’s this one lady at an agency who recommended me to look into needs-based scholarship and PTPTN loans. So I got a merit-based scholarship which partially covered the fees, and then PTPTN loans covered the rest. Total cost was about RM 90,000; we did not realize it’d be such an expensive option. But still, I wouldn’t have been able to complete my program, even after getting the partial scholarship, had it not been for PTPTN.” – Wong

For some, anxiety kicks in when they had to wait a long time to secure decent jobs

Graduate unemployment has been on an upward trend since the last four years. Coupled with loan repayment, this has caused a great deal of stress and anxiety amongst the borrowers who struggle to secure jobs with decent pay in their chosen fields. 

Among other things, our respondents recounted the harsh tone that was used to label defaulters, which in some cases were intended to shame them for not repaying, when the reality was that they were struggling to make ends meet. 

“Upon finishing, I did not work for 6 months and just helped my mom and supported my siblings. My father told me to wait to get something suitable in the field that I studied for. I actually started out with a RM 1,800 salary in Johor. Have to pay rent, plus I have to support my family back home. I didn’t pay back the loan initially as I was really struggling, and my younger brothers need my financial support also. I just tried to juggle everything and made sure everybody survived. I was in a bad financial situation and terima letter to remind me to pay back; there’s a warning, the tone is very penalising.” – Shima

“After my degree, I was unemployed for a few months. The same thing happened after I completed my master’s degree, and I was unemployed for six months. When I started kerja, I only got RM 2,500 with a master’s degree. Fortunately, after six months, I was lucky to receive a better offer. Tak semua orang akan ada the same opportunity, so PTPTN should take that into consideration. Sekarang gaji RM 1,800 pun tak tentu cukup makan, and benda ini (hutang pinjaman pendidikan) akan affect our monthly finances.” – Hafizah

“My first job paid roughly RM 2,500. I did feel some anxiety about my capability to repay back the loan, especially during the first (uncertain) year in the job market.” – Wong

“I was able to secure a temporary job 3 months after I finished my studies. But it took about 9 months to secure a job that suits my degree.” – Amalia

“I didn’t secure a job until about a year after I graduated. I was looking for a job for a while, and was doing some stuff part time. I admit that I didn’t fully pay my monthly loan repayments and there were some months that I did not make payments at all.” – Emma

“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.” – Indebted Generation, Part 2

Loan burden is a source of financial stress for B40 borrowers and targeted loan cancellation can help ease their burden

As stated by PTPTN, 55% of all its borrowers are from the B40 community. During interviews, our respondents expressed mixed reactions towards our policy recommendation to provide targeted and partial loan cancellation to alleviate the burden of low-income borrowers. 

Some of the respondents are of the opinion that a loan cancellation would not only bring about a positive impact on the borrowers, but also help secure the future of their families. However, others told us that such a policy should come with conditions.

“Growing up poor, we couldn’t even afford birthday cakes. Financial burden carries on in the family. Cancelling student loans for B40 students would greatly convenience their later adult lives because not everyone starts from the same level. It has a tremendous trickle down effect on generations to come.” – Wong

“Setuju (dengan penghapusan hutang) dengan syarat peminjam berjaya menghabiskan pengajian dengan cemerlang, aktif dalam kokurikulum, berakhlak baik, telah mendapat pekerjaan namun bergaji kecil, menunjukkan kesungguhan untuk membayar kembali pinjaman walaupun dalam jumlah yang kecil.” – Syah

“In order to abolish such debt, there must be something to be given back by the borrowers. Perhaps like working with government bodies etc.” – Amalia

“I believe you have to ‘give back what you owe’, but at the same time, I understand why some people cannot afford to pay back as I have been in their situation before. The whole experience of getting warning letters was very penalising. I believe ample time should be given for repayment, and borrowers should have the option to renegotiate their tenure, amount, and grace period. After all, they are not a bank!” – Shima

“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. 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 consistently. There was even partial student loan cancellation offered for lower income borrowers aged 60 and over in the 2019 Budget speech.” – Indebted Generation, Part 2

They want higher education to be less expensive and the current loan system to be reevaluated

When asked about policy changes they would like to see, most of them expressed hope for a more affordable, if not free, higher education which emphasises a needs-based approach. Some of them also called for the government to rethink its current higher education financing policy, which is heavily dependent on the loan system. 

“To me, education and health are something the government should provide for us. Okay je if they don’t provide cost of living allowance, as long as tuition fees and yuran asrama are covered. If not free for everyone, at least free for targeted groups like B40. Targeting the right group to receive subsidies is very important because jurang pendapatan kita banyak.” – Hafizah

“Education in general is a public good. Undergraduate attainment should be free because it has more trickle down effect on one’s life than one can measure.” – Wong

“I agree that we can afford to provide free education for our nation as long as we have a proper tax system and we let the experts run the education planning. For me, free education means every citizen is allowed to pursue education for free in any government institution with minimal fees for administration purposes.” – Amalia

“Tak setuju dengan pendidikan tinggi percuma kerana negara hanya wajib menyediakan pendidikan asas percuma saja sebagai keperluan kepada semua kanak-kanak. Untuk pendidikan tinggi, rakyat bebas memilih untuk meneruskan pengajian di peringkat tinggi atau tak. Bagi saya, keutamaan kerajaan harus kepada menolong peminjam golongan berpendapatan rendah untuk keluar daripada kelompok kemiskinan dengan mengurangkan birokrasi untuk pinjaman pendidikan tinggi,memberi subsidi/elaun sara hidup kepada peminjam golongan berpendapatan rendah, memudahkan peminjam golongan berpendapatan rendah mendapat pekerjaan, dan sebagainya.” – Syah

“I have some concerns about the different impacts of free education on ethnic minorities, for whom it is more difficult to enter public universities. I would like us to switch to a more needs-based admission. The minorities who are not earning as much are also the same people who cannot make it into IPTA. They have to fork out more money to get onto the same level of education (in private institutions).” – Emma

“My wish is that we can move away from the current expensive loan system that can be very penalising and pinching on people. Policymakers and political parties ought to reevaluate how the loan system works, and make sure there are sufficient job opportunities and security. Those are their responsibilities.” – Shima

“The government and taxpayers are already paying for a significant proportion of PTPTN borrowers’ education by paying the interest rate gap between PTPTN’s subsidised rate to their borrowers and the market rate PTPTN is charged by institutional lenders. It makes more sense to do away with this rather roundabout approach of subsidising a person’s education – replacing interest subsidies paid to financial institutions in favour of an outright tuition subsidy and cost of living stipend for B40 school leavers. It would also be beneficial for the loan administrator (i.e. PTPTN) as it provides some relief from managing a chunk of borrowers most likely to default on repayments. How much will this cost? Our rough estimate puts the direct subsidy cost at 1.3-2 times more than the current regime of subsidising student loans and covering default rates, conservatively assuming that all the courses financed are for degree programs and with a relatively high ratio of IPTS students.” – Indebted Generation Part 3

Conclusion

Our interviews and focus groups have provided a glimpse into the lived experience of  borrowers, and how their lives are affected by student loans. Their stories, coupled with our study last year, demonstrate that there is indeed a public appetite to reform Malaysia’s higher education financing policies. With the 15th general election (GE15) looming, our advice to parties and politicians seeking to get elected is that they should take into account the plight and voices of these student loan borrowers and reignite the public conversation on student loan reforms.  

Throughout this research series, we have repeatedly emphasised that B40 borrowers are disproportionately affected by student loan debt as compared to those from other income groups. In bringing the series to a close by presenting the real-life challenges that they face, we hope to convince both policymakers and the public on the need for progressive changes to bring about more affordable, accessible and equitable higher education for all Malaysians.

Email us your views or suggestions at editorial@centre.my

“Kaki Dadah”: The Need to Reform Public Perception Towards People Who Use Drugs in Malaysia

Early this year, a video of 19-year-old Daniel Iskandar being washed like a corpse as  ‘punishment’ for stealing a donation box in a Selangor mosque went viral. The video initially sparked public outrage, but perceptions quickly changed when news broke that the teen was found to be positive for drugs at the time of the recording. He was swiftly labelled with derogatory terms such as ‘kaki dadah’ and ‘penagih’. 

Reactions towards Daniel’s case is just one example of the long-standing stigma towards Persons Who Use Drugs (PWUDs) in Malaysia. His case is not isolated; similar reactions can also be seen, for example, to a 7-minute video published by local NGO Peluang in which  a PWUD shares her traumatic experience with the country’s legal process after committing a minor drug offence.

* We previously wrote about the impact of the over-incarceration of minor drug offenders on prison overcrowding in Malaysia here.

Person Who Use Drugs (PWUD) is an umbrella term that encompasses the spectrum of drug users ranging from minor drug offenders to drug users who suffer from substance abuse or addiction disorder.

Negative public perception towards PWUDs is hardly anything surprising in Malaysia, where decades of a war on drugs waged by authorities have inevitably left a lasting impression on the people. This sentiment, however, comes with consequences that go far beyond name-calling; research on the impact of stigma against PWUDs show that it significantly harms their recovery as well as reintegration into society.

Malaysia is not the only country with a history of a tough approach towards drugs. Ever since President Richard Nixon declared drugs as America’s ‘public enemy number one’ in 1971, countries around the world have followed suit and waged their own wars against drugs. A key aspect to supporting the anti-drug campaign has been messaging, which has helped shape negative public opinion towards not only drugs, but also drug dependents and drug offenders.  Policy documents, traditional media, and – nowadays – social media are some of the channels through which this sentiment has been shaped. Research has shown that wars on drugs are sustained through rigorous messages in government campaigns and the media, which in turn are used to justify harsher penalties for drug offences. 

In Malaysia, ever since drugs were declared as the ‘Main Threat to Society’ in 1983, the government’s messaging effort has focused on creating a hostile rhetoric towards drugs through the adoption of fear tactics — as seen in national campaigns such as ‘The More You Use The Less You Live’  and ‘Perangi Dadah Habis-Habisan’. To date, the national policy on drugs still reflects the same, punitive narrative towards drug use which tends to frame PWUDs as potential criminals who would commit crime to finance their addiction. 

Such narratives do not end at the policy level. Media reports of PWUD-related cases have long been profiling them as potential criminals or socially problematic individuals by nature. An analysis of 904 drug-related news articles that we conducted between August 2019 and January 2020 — after former Health Minister Datuk Seri Dr. Dzulkefly Ahmad announced the Pakatan Harapan government’s plan to decriminalise drug possession for personal use — shows that media attention is primarily focused on the criminal aspect of drug-related issues; we found that 41% of news reports are on capture and arrest, 28% on raids by law enforcement, and only a mere 7% covered drug policy related topics:

On top of that, around 21% of all news reports highlight drug use prominently despite it being an indicidental factor to other crimes; 12% of all news reports also highlight the convict’s previous drug charges, further framing and suggesting an association between ‘drugs’ and ‘crime’ to the audience. While it has been some time since our analysis was conducted, recent headlines suggest that our findings unfortunately still hold. 

Such messaging approaches, both by the government and the media, only stand to reinforce an already hardened societal stigma towards PWUDs. A 2020 study found that stigmatising language such as ‘addicts’ and ‘abusers’ create more barriers for PWUDs to either get help or reintegrate into society. In the case of Malaysia, PWUDs struggle to access opportunities such as employment, education, housing, and loans. Stories from formerly incarcerated PWUDs would describe the hardship they face in finding shelter after being released from prison, causing them to go homeless. With the lack of social support, many end up reverting to old habits — as reflected in the steady increase of recidivism rate among drug offenders in Malaysia since 2015.  

Today, as policymakers consider more science-backed and rehabilitative approaches to dealing with drug-related issues in Malaysia, we believe that the way PWUDs are portrayed in government and media messaging efforts should also change. As a start, there is a need to be more discerning about the socioeconomic factors that contribute to drug use – an aspect the news media tend to overlook when reporting on drug related matters. A more holistic and constructive reporting method when it comes to drug related matters could help change the way society views PWUDs. As observed in the case of Canada, reforming the way the media reports news (by emphasising public health instead of crime perspectives when reporting on drug cases, for example) can and does bring about shifts in public discourse about drugs and PWUDs.

Understanding the factors associated with drug use – socioeconomic (as mentioned above) as well as demographic – would also give policymakers a chance to better strategise their preventive effort in the future and tailor more fitting preventive programs to different targeted populations. It could be a first step towards eliminating societal stigma surrounding PWUDs. 

Beyond preventive efforts, education is key in the long run. Educating the public with facts about drugs could empower them to form more informed opinions. This approach brought about a favourable outcome in Iceland, where the country saw a significant reduction of adolescent substance abuse after incorporating a multifaceted prevention program at the school level. The Icelandic government not only focused on compulsory substance abuse education,  but also emphasised on strengthening community and family support networks through various state-sponsored after school programs — something we could perhaps learn from to foster a more inclusive and rehabilitative environment for PWUDs.

Ultimately, people hear what they are told to hear when it comes to drugs and PWUDs. It will undeniably take considerable effort to reform the way we think about them as a society, but one that is important and long overdue. Until this changes, however, we should remember that those like Daniel deserve empathy, not derogation.

Room For Rent, Part 1

Home affordability is a perennial issue affecting Malaysians, particularly young Malaysians. Aspects of the affordability issue have been frequently highlighted, including by The Centre in a primer published last year. One key fact worth reiterating here is the yawning chasm between median house prices and annual median household income – this disparity has nearly tripled from 2002 to 2019.

Even so, every consecutive Malaysian administration has continued to encourage home ownership. Most housing-related policies – ranging from subsidised home loans to large-scale government-subsidised projects like PR1MA – have focused on supplying homes for purchase and reducing obstacles to home ownership, especially for the younger generation.

However, given long-standing stagnant wages and rising household debt levels, should home ownership continue to be the overwhelming focus of government housing policy? Or should greater policy attention be directed towards those who cannot afford to buy a house and have resorted to renting, such as the proposed Residential Tenancy Act? And finally, might there be shifts in housing preferences towards long-term renting, especially by the young, if there were greater protections and incentives?

These are the questions we ask in our new research series which delves into Malaysian youths’ housing aspirations. We seek to understand the push and pull factors associated with home renting versus home owning. We also aim to recommend policies befitting a fair society comprising both renters and owners.

In this first instalment of the research series, we first look into the ownership versus renting landscape in Malaysia, and present findings from a preliminary poll on housing aspirations.

Home ownership and housing policy in Malaysia

Like many countries around the world, home ownership is the predominant mode of housing1 in Malaysia. The 2019 Household Income and Basic Amenities Survey shows that home ownership in Malaysia is high and has continued to rise since 2010, albeit slowly: from 72.5% in 2010, to 76.3% in 2016, and most recently to 76.9% in 20192.

Within the context of Southeast Asia, the rate of home ownership in Malaysia is not unusual; only the Philippines has a lower home ownership rate at 64.1% (2019). Other ASEAN neighbours have comparably high rates of home ownership such as Thailand (77.4%, 2010), Indonesia (81.1%, 2021), Myanmar (85.5%, 2014), Vietnam (88.1%, 2019) and Singapore (88.9%, 2020)3.

Malaysia’s and these ASEAN countries’ home ownership rates are quite high in comparison to developed countries such as the United States (65.5%, 2021), the United Kingdom (65.2%, 2018), Japan (61.2%, 2018), Germany (50.4%, 2020), and France (64.0%, 2020). Switzerland, interestingly, only has a 42.3% home ownership rate (2020)!4

In the 1960s, the Malaysian government’s housing priority had largely focused on providing shelter for low-income households especially in urban areas. Public-funded low-cost housing, such as the Projek Perumahan Rakyat (PPR), allowed low-income households to rent or own a property at a subsidised cost.5 After the New Economic Policy was introduced in 1970, a 30% Bumiputera quota for the sale of new housing stock, as well as a 5 percent discount, were introduced to facilitate the community’s urbanisation and home ownership.

As the Malaysian middle class continued to grow in number, the demand for better affordable housing continued to rise in tandem, driven by an environment of rising house prices and cost of living. This has led to a significant shift in government policy over the past two decades – ensuring supply and ownership of homes not only among low-income households, but also among middle-income families.

Apart from increasing the supply of ‘affordable’ housing via new programs such as PR1MA, various financing incentives were introduced to facilitate ownership such as the My First Home Scheme6, Youth Housing Scheme, the Home Ownership Campaign7, the Private Affordable Ownership Housing Scheme (MyHome)8 and MyDeposit.

However, Malaysia’s household debt has risen to levels unseen before, from only 47% of GDP in 2000 to 93% in 2020. Given these high levels of household debt – which are likely an understatement of total household borrowings9 – it is questionable whether further policy support towards home ownership via easier financing is a good idea.

The ‘hidden’ renter-households

Malaysia’s relatively high home ownership rate masks an important fact: there is a significant proportion of households that do not own homes in the Klang Valley. As of 2019, home ownership rates in Selangor and Kuala Lumpur are 69.7% and 63.3% respectively, which are considerably lower than the national average of 76.9% (Figure 1).

Breaking down the data according to household income reveals a more stark reality. Only 52.5% and 45.3% of B40 households in Selangor and Kuala Lumpur own their own homes, which is much lower than the average home ownership rate for B40 households nationally which stands at 73.1% (Figure 2).10

The picture is similar for M40 Klang Valley households; only 65.4% and 51.2% M40 households in Selangor and Kuala Lumpur respectively own the homes that they live in. In comparison, the home ownership rate for M40 households nationally is 75.5%.

At higher incomes however, the home ownership gap between Klang Valley households and Malaysia overall closes. Overall, 87.0% of Malaysia’s T20 households own homes compared to 86.6% of T20 households in Selangor and 77.9% in Kuala Lumpur.

Thus, the data shows that a sizable proportion of B40 and M40 households in Klang Valley are renting relative to the rest of the country. Renting is likely driven by the lack of affordability in particular locations but are there other factors at play? To get a fuller picture of renting patterns and its determinants, we collaborated with market research firm Dattel on a short poll in January 2022 comprising an urban sample of 809 respondents.

Who rents?

Geography

Our short January 2022 poll presented a pattern similar to DOSM’s 2019 home ownership data, though because our sample is mainly concentrated in urban centres, it resulted in smaller differences between regions. The poll results showed that renting is more prevalent in Klang Valley (41.0%), the South Peninsular states (38.4%) and East Malaysia (35.1%). This is followed by those living in East Peninsular states (27.3%) and North Peninsular states (26.6%) (Figure 3). In all regions, except for North Peninsular and East Peninsular, the percentage of respondents who are renting is higher than those living in their own homes.

In terms of home ownership, the highest percentage is among respondents from North Peninsular states at 37.3%. This is followed by East Peninsular states (34.9%), South Peninsular states (31.7%), Klang Valley (29.3%) and East Malaysia (24.0%).

Respondents who are staying with their parents or relatives are quite substantial in all regions, ranging from 26.3% in South Peninsular to 36.6% in East Malaysia.

Age

Unsurprisingly, renting is higher among younger respondents compared to older respondents. 38.9% of respondents aged 20-29 are currently renting, followed by those aged 30-39 at 35.4% (Figure 4). It is interesting to note that a quite significant proportion of older respondents, i.e. those aged between 40 and 59, are also renting. The survey found that 34.1% and 25.9% of respondents aged 40-49 and 50-59 respectively are currently renting their homes.

A substantial percentage of younger respondents are staying with their parents or relatives. 45.8% and 31.2% of respondents aged 20-29 and 30-39 respectively do so compared to much lower rates among respondents aged 40-49 (20.2%) and 50-59 (5.8%). Staying with relatives become more common again among the oldest respondent band, those aged 60-69 (18.6%), perhaps due to ageing and caregiving needs.

Unsurprisingly, home ownership increases with age. The percentage of respondents who live in their own property is 42.8% for 40-49 age group, 60.7% for 50-59, and 67.6% for 60-69 compared to 12.2% and 30.5% among the 20-29 and 30-39 age groups respectively.

Top Reasons for Renting

The biggest reason for renting is the unaffordability of down payment, cited by 44.5% of respondents who are currently renting (Figure 5). However, preferring to live in a particular location is also a relatively big reason, chosen by 23.9% of renting respondents. 17.2% of renting respondents said that they were unable to qualify for a home loan. And lastly, 7.2% of renting respondents said they chose to rent due to the flexibility it offers.

Unaffordability of down payment is the clearest reason for renting across all age groups, except for the 40-49 age band (Figure 6). Location preference is a relatively important reason for the 30-39 age band as well as the 40-49 age band compared to other age groups. Inability to qualify for home loans is not a top reason across all age groups, which runs counter to many policy prescriptions on loosening loan qualifying criteria. Flexibility is the least chosen reason among most age groups though curiously, it is quite an important reason for the 50-59 age group (the small sample size of renters within this age group may be one reason for this result).

While down payment unaffordability is the most cited reason in all regions (36.2% to 48.4%), location preferences is quite an important reason for renting in Klang Valley (30.7%) and East Malaysia (25.1%) (Figure 7). Meanwhile, inability to qualify for a home loan is a relatively strong reason in South Peninsular (25.2%) and East Peninsular states (28.5%), compared to other regions.

Flexibility, curiously, is quite a significant reason for renting in the North Peninsular (14.2%) and East Malaysia (14.1%). One possible reason could be that respondents in those regions do not have a long-term residence expectation and plan to relocate to other, perhaps more urbanised, regions in the future.

Future Housing Aspirations

Overall, 44.3% of respondents aspire to buy their own home while 27.4% intend to continue living in their own home. 12.7% of respondents plan to stay indefinitely with their parents or relatives, while 12.0% look to rent long-term as a housing option.

Aspiration towards home ownership is higher among younger respondents at 59.7% and 46.0% among the 20-29 and 30-39 age groups followed by 38.0% of 40-49 years old respondents (Figure 8). The proportion drops drastically for respondents aged 50 and above, at 13.5% and 8.3% for the 50-59 and 60-69 age groups – unsurprisingly, given higher rates of home ownership amongst older respondents.

Therefore, it is also not surprising that the percentage of respondents who want to continue living in their own home is higher in older age groups. 70.6% and 65.6% of 60-69 and 50-59 years old respondents want to continue living in their own home. The figure drops to 38.5% among 40-49 years old respondents, followed by 24.8% among the 30-39 age group and 6.7% among the 20-29 age group.

Renting long-term is not a popular choice among younger respondents compared to older respondents, which we found surprising. Long-term renting as an option makes up only 12.4% and 13.7% respectively for the 20-29 and 30-39 age groups. A relatively high proportion of respondents aged 50-59, however, do intend to rent long-term (18.3%).

The preference for home ownership holds when we look at the responses from the perspective of regional location. Respondents with plans to buy a home or continue living in one’s property range from 69.1% to 78.2% across all regions (Figure 9).

The same predominance in preference for home ownership holds when we look at the pattern across gender categories. It is interesting to note that the percentage of male respondents (14.9%) who intend to rent long-term is higher than the percentage of female respondents (9.0%) (Figure 10).

Conclusion

The policy bias towards home ownership is a common one, particularly amongst Asian countries. One reason is home ownership’s tangible wealth effect, as property prices tend to appreciate in the long-run. Asian societies also traditionally view home ownership as a positional good which provides respectable social standing. From the policymakers’ perspective, home ownership contributes to social stability and rootedness in a state or country.

And yet, this policy bias is not without problems. Societal pressures towards home ownership, in a situation of relatively high house prices and stagnant wages, would likely result in even more unsustainable levels of household debt and stress. The bias towards home ownership also arguably takes away policy attention on making rents affordable and fair.

Based on DOSM data and our short preliminary poll, there is a significant segment of Malaysians who do not own homes, mostly out of necessity, but some also out of choice. Overzealousness in promoting home ownership will neglect the needs of citizens who are currently renting, and may ignore the needs of changing values around long-term renting in future.

Policy attention should not be confined to ‘upgrading’ tenants to homeowners, particularly when renting disproportionately affects low-income families in the cities; half of B40 families in Klang Valley are renting, perhaps for the foreseeable future, and thus require greater renter protection. Attention must be directed towards strengthening the legal and institutional frameworks underlying the rental market, which was also pointed out by Bank Negara Malaysia back in 2017.

The government is beginning to make this a priority. The Ministry of Housing and Local Government is proposing an enactment of the Residential Tenancy Act to prepare legal provisions to protect homeowners’ and tenants’ rights, prepare a uniform template for residential tenancy agreements, and to resolve disputes between parties involved in residential-tenancy transactions. Interestingly, it includes a proposal to create a new government entity to handle security deposits. While the enactment is in its early consultative phase (and has received pushback from developers and landlords amongst others), it is a timely intervention to regulate this long-neglected area.

In Part 2 of this research series, we will look into policies adopted by other countries and cities to make renting a viable long-term practice. Stay tuned.

  1. It must be noted that in Malaysia, the official home ownership rate includes informal housing, which is defined as houses built without development orders (i.e. this includes houses illegally built on non-private lands or on river bank reserves, or “kampung” houses built by the local community.) Such houses are common in rural areas, and are usually built haphazardly without complying to approved housing standards and regulations. Nevertheless, they are still considered as part of the stock of household-owned homes in the official data. This may not be the case for other countries.
  2. Source: 2010 figure, Khazanah Research Institute (2015); 2016 figure, Department of Statistics Malaysia’s Household Income and Basic Amenities 2016 Survey.
  3. Source: respective countries’ statistics departments.
  4. Source: Trading Economics.
  5. Projek Perumahan Rakyat (PPR) flats can be rented for RM128 per month, or bought for RM35,000 in Peninsular Malaysia and RM42,000 in West Malaysia. Prospective tenants or owners must meet certain eligibility criteria such as a household income not exceeding RM3,000 per month.
  6. The My First Home Scheme, introduced in the 2011 Budget, allowed first-time buyers to obtain loan financing up to 110% of the purchase price without needing to pay any down payment. This scheme was guaranteed by Cagamas, the National Mortgage Corporation.
  7. The Home Ownership Campaign, first introduced in 2019, and eventually extended to December 2021, was introduced to encourage home ownership by reducing cost of property purchase. Qualified participants would enjoy full exemption on stamp duty for properties up to RM1 million, partial exemption on stamp duty for properties up to RM2.5 million, and Instrument of Securing Loan stamp duty exemption for properties of up to RM2.5 million. On top of that, buyers can enjoy a 10% discount for properties listed under the scheme.
  8. The MyHome scheme, introduced in the 2014 Budget and lasted until November 2020, allowed eligible homebuyers to have their down payment paid by the government. The MyDeposit scheme, introduced in 2016 and which lasted until October 2021, offered a rebate of 10% of the house price or RM30,000, whichever was lower, to first-house buyers of properties priced below RM500,000.
  9. Unclassified borrowings such as ‘buy now pay later’ schemes are not yet included in household borrowing statistics
  10. B40, M40, and T20 Malaysia refer to the household income classification in Malaysia. B40 represents the Bottom 40%, M40 represents the middle 40%, whereas T20 represents the top 20% of Malaysian household income.

Generasi Berhutang, Bahagian 3

Dalam Bahagian 1 siri penyelidikan ini, kami menggariskan masalah-masalah pokok tentang hutang pinjaman pendidikan di Malaysia. Untuk menampung usaha pengkorporatan universiti awam dan perkembangan pesat universiti swasta, pinjaman pendidikan diperkenalkan untuk membiayai kos pendidikan tinggi serentak dengan perkembangan bilangan pelajar. Sejak penubuhan PTPTN pada 1997, sebanyak RM62.5 bilion pinjaman pendidikan telah dikeluarkan kepada 3.5 juta peminjam. Keadaan ini mungkin munasabah sekiranya negara dan masyarakat mendapat pulangan positif secara meluas daripada pendidikan tinggi. Walau bagaimanapun, mobiliti sosial tidak direalisasikan secara sekata. Dalam erti kata yang lain, ramai peminjam tidak mendapat pekerjaan dan pendapatan yang setimpal dengan pendidikan mereka.

Dalam Bahagian 2, kami mengemukakan tiga dasar progresif untuk menangani isu berkaitan dengan hutang pinjaman pendidikan yang tertunggak pada masa ini: penghapusan pinjaman atau pengampunan hutang pendidikan secara bersasar, pembayaran balik berasaskan pendapatan, dan pengawasan yang lebih meluas terhadap operasi dan pembiayaan PTPTN. Mengkategorikan para peminjam mengikut keupayaan mereka untuk membayar balik merupakan tonggak utama cadangan-cadangan ini.

Dalam bahagian ketiga ini, kami melontarkan beberapa idea untuk memperbaharui cara rakyat Malaysia membiayai pendidikan tinggi mereka. Antara intipati penting dalam perbincangan ini adalah perlunya kita menyedari bahawa landskap pendidikan tinggi kini kian berubah, dan ijazah tradisional bukan lagi satu-satunya jalan untuk mendapatkan pendidikan tinggi. Satu lagi aspek penting pembaharuan ini adalah perubahan yang diperlukan dalam struktur institusi, atau bagaimana untuk menyemak semula kaedah pembiayaan pendidikan. Selanjutnya, idea pembaharuan kami turut melibatkan cadangan untuk menyediakan langkah pembiayaan pendidikan yang lebih adil untuk keluarga yang kurang berkemampuan supaya kebergantungan meluas kita pada pinjaman pendidikan dapat dikurangkan.

Dalam artikel-artikel sebelum ini, kami telah soroti laporan media mengenai graduan dan anak muda Malaysia yang terperangkap dalam pekerjaan bergaji rendah selepas mengumpul hutang pendidikan yang besar untuk membiayai pengajian tinggi mereka. Ini konsisten dengan survei yang kami jalankan dari Ogos hingga September 2021. Satu pertiga daripada responden kami berkata pendidikan mereka tidak berbaloi dengan hutang pendidikan yang ditanggung. 59% berkata hutang pinjaman pendidikan menyumbang kepada tekanan kewangan manakala 57% berkata hutang pinjaman pendidikan menyumbang kepada kelewatan membeli rumah. 77% daripada responden bersetuju bahawa anak muda tidak sepatutnya perlu berhutang untuk mencapai pendidikan tinggi, dan majoriti yang lebih besar, 82% berpendapat bahawa tidak wajar golongan miskin perlu berhutang.


Beban hutang pinjaman pendidikan mendapat perhatian dalam Bajet 2022, di mana diskaun pembayaran balik telah diumumkan. Walaupun ia adalah petanda positif bahawa kerajaan memberi perhatian kepada isu pinjaman pendidikan, diskaun yang ditawarkan lebih bermanfaat untuk peminjam yang mempunyai kemampuan untuk membuat penyelesaian pinjaman yang besar atau untuk peminjam yang mampu membuat potongan gaji berjadual. Secara ringkasnya, ia memanfaatkan peminjam yang sudah pun mempunyai kemampuan kewangan. Diskaun-diskaun tersebut – yang sebenarnya diulang daripada pengumuman sebuah Belanjawan yang terdahulu – mencerminkan corak pemikiran dasar yang telah lama wujud tentang pinjaman pendidikan tinggi. Kami berpendapat bahawa sudah tiba masanya corak pemikiran ini dipertimbangkan semula secocok dengan perkembangan semasa.

Daripada ijazah tradisional kepada TVET dan mikrokredential

Antara pertimbangan utama dalam cadangan kami ialah trend pendidikan yang semakin beralih daripada program ijazah tradisional. Di Amerika dan UK, para pelajar dan ibu bapa sudah mula mempersoalkan pengajian ijazah tradisional dan sama ada kos untuk mengikutinya masih lagi berbaloi. Pandemik COVID-19 mungkin hanya akan mempercepatkan perkembangan ini dan menjadi punca kepada penurunan mendadak pendaftaran pelajar akhir-akhir ini.

Malaysia secara beransur-ansur bakal menghadapi keadaan yang sama. COVID-19 telah memburukkan, tetapi tidak menyebabkan, trend pengangguran siswazah dan gaji rendah siswazah. Pengangguran siswazah meningkat 22.5% kepada 202,400 pada 2020 daripada 165,200 pada 2019. Lebih merisaukan, nampaknya tren ini telah menaik sejak sekurang-kurangnya empat tahun lepas: pengangguran siswazah berjumlah 162,000 pada 2018, meningkat daripada 154,900 pada 2017. Ia juga memberi kesan yang signifikan kepada siswazah Bumiputera yang menghadapi kadar pengangguran yang agak tinggi.

Di samping kadar pengangguran, siswazah turut berhadapan dengan masalah gaji rendah;  survei oleh Kementerian Pengajian Tinggi telah mendapati bahawa terdapat siswazah yang memperoleh gaji serendah RM1,000-1,500 sebulan. Bandingkan hasil ini dengan masa dan komitmen kewangan program ijazah yang biasanya mengambil masa sekurang-kurangnya empat tahun untuk diselesaikan. Program diploma tidaklah jauh lebih singkat – ia mengambil masa kira-kira 24-36 bulan untuk disiapkan dan lebih lama lagi jika dilakukan secara sambilan.

Mengambil kira situasi tukar-ganti dasar (policy trade-off) ini, penggubal dasar harus melakar semula corak pemikiran dasar yang memihak kepada ijazah akademik tradisional. Menuntut ilmu melalui ijazah adalah matlamat yang patut dipuji, tetapi adakah ijazah tradisional masih pilihan yang tepat untuk semua pelajar lepasan sekolah? Jawapannya adalah tidak, jika kita mengambil iktibar daripada pengalaman negara maju. Ramai lepasan sekolah mungkin boleh mendapat lebih manfaat – dan menjimatkan banyak masa dan wang – dengan mendaftar dalam latihan teknikal, program perantisan ‘belajar sambil bekerja’, kursus jangka pendek, skim kemahiran semula, kursus kelayakan mikro (mikrokredential), pembelajaran sepanjang hayat atau gabungan pilihan-pilihan ini.

Selain daripada pertimbangan kewangan, peralihan daripada ijazah tradisional juga didorong oleh perubahan landskap pekerjaan. Lepasan sekolah hari ini boleh membina portfolio mereka untuk bekerja sendiri ataupun bekerja bebas (freelance) berbanding dengan mendaftar di kolej untuk membina resume mereka untuk pekerjaan sepenuh masa.

Pemerhati dasar pendidikan Malaysia telah lama mengagumi Pendidikan dan Latihan Teknikal dan Vokasional (TVET) di negara lain seperti Sweden dan Jerman, di mana sistem TVET melatih pelajar untuk pelbagai bidang pekerjaan. Kadar pekerjaan bagi mereka yang mempunyai ijazah vokasional di negara-negara ini hampir sama tinggi dengan pemegang ijazah sarjana muda.

Kebolehpasaran graduan TVET juga tinggi di Malaysia, di mana ia mencapai kadar 98% dalam beberapa tahun kebelakangan. Ini jelas merupakan prestasi yang lebih baik daripada rakan-rakan mereka yang memegang ijazah. Pada tahun 2020, Pengarah Bahagian TVET, Azman Adnan dari Kementerian Pengajian Tinggi berkata bahawa kolej vokasional adalah penyedia terbesar pekerja berkemahiran di negara ini dan bahawa TVET adalah penyelesaian kepada ketidakpadanan kemahiran (skills mismatch) dan isu pengangguran siswazah.

TVET lebih murah, lebih pendek dan lebih dekat dengan keperluan industri. Walaubagaimanapun, tumpuan dasar dan peruntukan sumber pada TVET masih belum mencapai tahap yang diterima oleh sistem ijazah tradisional.

Namu begitu, terdapat beberapa usaha untuk mendorong perkembangan TVET dalam beberapa tahun ini. Dalam Rancangan Malaysia Ke-12, kerajaan bercadang untuk mengukuhkan program-program TVET dengan menaik taraf ekosistem industri, menambah baik akreditasi, mewujudkan sistem penarafan institusi TVET, dan mempromosikan platform berpusat yang menunjukkan data mengenai tawaran pekerjaan. Di bawah Bajet 2021, kerajaan telah memperuntukkan RM60 juta untuk Sistem Latihan Dual Nasional (SLDN), skim latihan yang berasaskan kompetensi dan berorientasikan industri. Elaun SLDN juga dinaikkan daripada RM600 kepada RM1,000 bagi menggalakkan lebih ramai peserta daripada isi rumah B40. Peruntukan keseluruhan untuk TVET juga telah meningkat daripada RM6 bilion dalam Bajet 2021 kepada RM6.6 bilion dalam Bajet 2022, sekali gus mencerminkan peningkatan penekanan kerajaan pada TVET.

Walau bagaimanapun, banyak lagi perlu dilakukan. Laporan Ketua Audit Negara 2019 mendapati program TVET yang dibiayai kerajaan secara keseluruhannya tidak mencapai sasaran Rancangan Malaysia Ke-11, malah sekadar menghasilkan separuh daripada jumlah graduan yang diunjurkan. Pendaftaran juga makin menurun dari 2016 hingga 2020, sungguhpun pandemik COVID-19 pastinya merupakan faktor penyumbang memandangkan banyak program TVET memerlukan latihan bersemuka.

Fragmentasi program dan pentadbiran TVET turut menjadi masalah. Institusi TVET dibiayai oleh kerajaan melalui enam kementerian, dan masalah pemecahan ini telah dibangkitkan sebelum ini dan keperluan untuk penyelarasan yang lebih baik telah diakui oleh kedua-dua kerajaan Pakatan Harapan dan Perikatan Nasional. Selain dari isu ‘penyelarasan’, rombakan besar dalam tadbir urus, perancangan dasar dan jaminan kualiti masih belum dilaksanakan walaupun keperluan berbuat demikian telah dibangkitkan beberapa kali, termasuk oleh Ahli Parlimen Nurul Izzah Anwar yang pernah berkhidmat sebagai pengerusi Jawatankuasa Pemerkasaan TVET.

Untuk mengangkat kepentingan TVET dan letak duduknya supaya setaraf dengan program ijazah dan institusi tradisional, kerajaan perlu melaksanakan pembaharuan struktur. Di Singapura dan Vietnam, hanya satu entiti menyelia sistem TVET negara masing-masing. Malahan dalam kes Vietnam, terdapat undang-undang khusus mengenai pendidikan vokasional, yang membolehkan kerajaan Vietnam melabur dengan secara substansial dalam TVET serta menggalakkan penyertaan sektor swasta melalui insentif percukaian, kredit, tanah, dan latihan para pendidik.

Walaupun mempunyai populasi yang jauh lebih kecil dan hanya lapan institusi TVET, Singapura mempunyai lebih 113,000 enrolmen pelajar TVET, angka yang setanding dengan jumlah enrolmen di politeknik dan kolej komuniti di Malaysia. Ini selaras dengan tinjauan KRI yang mendapati kurang daripada 10% belia di Malaysia mendaftar di politeknik TVET (tidak termasuk pusat latihan kemahiran) selepas pendidikan menengah.

Selain daripada TVET, kita juga harus memberi penekanan dan sumber kepada kursus latihan semula dan peningkatan kemahiran jangka pendek. Ini termasuklah apa yang dipanggil kelayakan mikro (mikrokredential). Berbanding dengan ijazah tradisional dan sijil TVET, kursus mikrokredential adalah lebih pendek, lebih fleksibel, dan lebih tertumpu pada kemahiran atau topik tertentu. Ia boleh ditawarkan dalam talian, secara bersemuka, atau melalui gabungan kedua-duanya.

Di Malaysia, naratif dasar sekitar pembangunan kemahiran dan mikrokredential telah disasarkan terutamanya kepada golongan dewasa yang bekerja. Pembiayaan adalah terikat dengan agensi seperti Kumpulan Wang Pembangunan Sumber Manusia (HRDF), Skim Insurans Pekerjaan di bawah PERKESO, dan Perbadanan Ekonomi Digital Malaysia (MDEC). Seperti mana TVET perlu diperluaskan, naratif dasar untuk pembangunan kemahiran dan mikrokredential juga harus dikembangkan kepada golongan lepasan sekolah.

Bukan semua pelajar lepasan sekolah pasti tentang apa yang mereka ingin belajar atau kerjaya yang ingin mereka ceburi. Mikrokredential menawarkan peluang untuk menguji minat bidang atau kerjaya tertentu sebelum melabur masa dan komitmen kewangan yang besar. Kerajaan boleh memberi insentif untuk menggalakkan tren ini. Contohnya, program SGUnited Skills di Singapura bukan sahaja menawarkan akses kepada pelbagai kursus latihan pendek bersubsidi untuk kemahiran dalam permintaan dan baru muncul (in-demand and emerging skills), ia juga menawarkan sokongan nasihat kerjaya dan elaun latihan bulanan sebanyak SGD1,200 sepanjang tempoh kursus untuk membantu menampung perbelanjaan hidup.

Dalam bahagian ini, kami telah menyatakan pendirian kami akan keperluan untuk dasar yang memihak kepada pemilikan ijazah tradisional sekarang beralih kepada pembangunan sistem sokongan dan promosi TVET serta kursus pembangunan kemahiran pendek atau mikrokredential di kalangan pelajar lepasan sekolah. Kami berpendapat bahawa keberhutangan pinjaman pendidikan di kalangan golongan muda sebahagiannya didorong oleh persepsi status dan andaian pulangan positif daripada pemilikan ijazah. Andaian ini perlu dikaji semula bukan sahaja oleh penggubal dasar tetapi juga oleh para majikan. Tenaga kerja muda hari ini berhadapan dengan inflasi ijazah, atau permintaan untuk ijazah sarjana muda dalam pekerjaan yang tidak benar-benar memerlukannya. Peralihan dasar ke arah TVET dan pembangunan kemahiran juga perlu disertakan dengan usaha untuk mengemas kini majikan mengenai penetapan kriteria kelayakan yang lebih relevan dengan keperluan semasa.

Beralih dari model pinjaman kepada subsidi terus untuk pelajar B40

Kerajaan semakin menggalakkan simpanan awal sebagai cara untuk membiayai pengajian tinggi. Ini merupakan langkah yang baik. Walau bagaimanapun, insentif dasar untuk menggalakkan simpanan pendidikan berkemungkinan akan lebih dimanfaatkan oleh keluarga berpendapatan pertengahan ke tinggi yang mampu menyediakan wang untuk tujuan ini. Bagaimana pula dengan isi rumah yang tidak mampu untuk menabung?

Kita harus beralih daripada pendekatan yang meminta keluarga B40 bergantung pada pinjaman pendidikan dan mempertimbangkan kaedah subsidi secara langsung. Pertama sekali, beban hutang pinjaman pendidikan nampaknya memberi kesan yang tidak seimbang kepada peminjam B40. Pengerusi PTPTN, menggunakan rekod badan itu sendiri, menulis bahawa meskipun hanya 55% daripada peminjam PTPTN datang daripada isi rumah B40, seramai 97% daripada peminjam lalai (yang tidak dapat membuat pembayaran balik secara konsisten) adalah daripada kumpulan pendapatan B40.

Kedua, seperti yang kami gariskan dalam Bahagian 1 siri kajian ini, kerajaan dan pembayar cukai sudah pun membiayai sebahagian besar pendidikan peminjam-peminjam PTPTN dengan membayar jurang kadar faedah antara kadar subsidi PTPTN kepada peminjam mereka dan kadar faedah pasaran yang dikenakan terhadap PTPTN atas pinjaman yang mereka ambil dari institusi kewangan. Memansuhkan pendekatan yang agak berpusing-pusing untuk mensubsidi pendidikan seseorang ini – dengan cara menggantikan subsidi faedah yang dibayar kepada institusi kewangan dengan pemberian subsidi tuisyen dan kos sara hidup secara terus untuk lepasan sekolah B40 adalah satu langkah yang lebih wajar dan bijaksana. Ia juga memberi manfaat kepada pengurusan PTPTN kerana ia memberikan sedikit kelegaan daripada menguruskan sebahagian besar peminjam yang berkemungkinan besar menjadi penghutang lalai.

Berapakah kos yang diperlukan untuk melaksanakan cadangan ini? Anggaran kasar kami meletakkan kos subsidi langsung pada 1.3-2 kali ganda lebih tinggi daripada kaedah semasa mensubsidi pinjaman pendidikan dan secara konservatif mengandaikan bahawa semua kursus yang dibiayai adalah untuk program ijazah dan dengan nisbah pelajar IPTS yang agak tinggi. Kos untuk subsidi langsung ini mungkin lebih rendah dengan adanya skim sokongan untuk pelajar IPTA serta peralihan daripada program ijazah tradisional kepada program diploma, TVET dan mikrokredential.

Gratuidad ialah program yuran (tuisyen) percuma bersasar yang dilaksanakan di negara Chile. Polisi ini digubal selepas bertahun-tahun protes mahasiswa terhadap kenaikan yuran dan lambakan hutang pinjaman pendidikan. Gratuidad menyediakan tuisyen percuma kepada pelajar dari 60% isi rumah terbawah. Subsidi tuisyen ditentukan oleh formula yang membahagikan institusi pendidikan kepada kategori mengikut tempoh pentauliahan mereka (sebagai proksi untuk kualiti) dan kemudian menetapkan tuisyen terkawal untuk setiap kumpulan dan setiap program pengajian.

Subsidi yuran pengajian dan kos sara hidup pelajar B40 bukan semestinya hanya datang daripada kerajaan dan pembayar cukai. Syarikat, yayasan persendirian dan individu berkemampuan tinggi juga boleh diberi insentif untuk menyumbang dan menambah kepada subsidi langsung ini. Dalam bahagian seterusnya, kami majukan komponen terakhir dalam cadangan pembaharuan pembiayaan pendidikan kami untuk memudahkan simpanan pendidikan di Malaysia supaya menjadi satu kelaziman sosial.

Daripada skim terputus kepada akaun pembelajaran sepanjang hayat (APSH)

Dewasa ini, seseorang warga Malaysia boleh membuat simpanan pendidikan melalui SSPN-i; memohon pinjaman daripada PTPTN atau PTPK; mencarum kepada HRDF, KWSP (Akaun 2), atau EIS; atau mengenalpasti tawaran agensi yang berbeza-beza dan mengambil kursus bersubsidi daripada MDEC, MARA, TEKUN dan banyak lagi.

Bagaimana jika ada cara yang lebih baik untuk membiayai pendidikan lepasan menengah seseorang sehingga usia tua? Cara yang menampung simpanan awal oleh ibu bapa serta subsidi langsung oleh kerajaan dan caruman atau biasiswa daripada bakal majikan atau dermawan? Kaedah yang mengikat dana tersebut dengan rakyat Malaysia secara individu dan bukannya dengan agensi latihan tertentu?

Menggabungkan kedua-dua pertimbangan di atas, kami mencadangkan akaun pembelajaran sepanjang hayat (APSH) untuk setiap rakyat Malaysia yang diuruskan sebagai dana pelaburan yang serupa dengan KWSP. Akaun tersebut hanya boleh digunakan untuk tujuan pendidikan, termasuk kos sara hidup. Dana itu disediakan secara automatik semasa kelahiran, dan setiap anak yang lahir di Malaysia akan menerima RM100 yang dikreditkan ke APSH mereka semasa pendaftaran kelahiran. Kanak-kanak yang dilahirkan dalam isi rumah B40 boleh dikreditkan dengan jumlah yang lebih tinggi bergantung pada tahap pendapatan isi rumah.

Akaun ini akan menjadi kaedah utama untuk skim simpanan sukarela yang diberi insentif oleh kerajaan untuk perbelanjaan pendidikan masa depan kanak-kanak itu, sekali gus menggabungkan ciri ADAM50 dan SSPN hari ini. Akaun ini juga akan menjadi tempat deposit untuk sebarang subsidi kerajaan untuk tujuan pendidikan dan latihan kemahiran pada masa hadapan, termasuklah pemberian insentif untuk program kemahiran semula (reskilling), sama seperti program SkillsFuture yang disediakan oleh kerajaan Singapura. Akaun tersebut juga boleh menerima pindahan daripada Akaun 2 KWSP serta deposit oleh agensi kerajaan, yayasan swasta, dermawan, atau bakal majikan untuk menyokong pendidikan pasca menengah, sama ada pinjaman atau biasiswa untuk program ijazah, diploma, TVET, mikrokredential, perantisan dan lain-lain kursus pembelajaran atau peningkatan kemahiran pada masa hadapan.

PTPTN barangkali berada pada kedudukan terbaik untuk mengendalikan urus tadbir dana ini memandangkan mereka telah pun menguruskan SSPN dan merupakan entiti yang bertanggungjawab mempromosikan tabungan pendidikan. Bagaimanapun, PTPTN perlu distruktur semula untuk menambah baik tadbir urusnya dan meluaskan mandatnya. Pelantikan ke dalam lembaga pengarah PTPTN hendaklah sama ketat prosesnya dengan pelantikan ke dalam lembaga pengarah KWSP untuk menjamin lembaga pengarah yang berkelayakan, cekap dan berautonomi. Untuk penyelarasan yang lebih baik, Perbadanan Tabung Pembangunan Kemahiran atau PTPK dan HRDF boleh digabungkan dengan PTPTN untuk mewujudkan suatu superfund yang berfokus untuk mengurus kewangan bagi pembelajaran sepanjang hayat.

Kerajaan Malaysia telah memperkenalkan pelepasan cukai untuk majikan (tamat pada 31 Disember 2021) yang membantu membayar pinjaman pelajar pekerja-pekerja mereka. Sekiranya rakyat Malaysia mempunyai akaun pembelajaran sepanjang hayat individu, insentif sedemikian juga boleh ditawarkan kepada individu dan syarikat yang menyumbang ke dalam akaun tersebut.

Kesimpulan

Melabur sejumlah wang dan masa untuk mendapatkan pengajian tinggi adalah satu keputusan kewangan yang besar. Untuk mengurangkan ketidaksamaan, kita perlu mengakui bahawa keputusan ini lebih berisiko terutamanya untuk segmen masyarakat yang kurang bernasib baik. Siri kajian kami ini telah menunjukkan kesan-kesan baik dan buruk apabila masyarakat bergantung pada pinjaman untuk membiayai pengajian tinggi. Walaupun pinjaman pendidikan telah meningkatkan akses kepada universiti dan kolej, ia memerangkap ramai graduan dalam hutang terutamanya mereka daripada isi rumah B40. Hal ini diburukkan dengan prospek kerjaya dan gaji yang tidak menentu dalam keadaan ekonomi negara yang masih rapuh.

Dengan mengambil kira latar belakang ini, kami menyokong untuk kerajaan mewujudkan subsidi terus dan elaun kos sara hidup untuk lepasan sekolah B40. Program ijazah tradisional (yang agak panjang dan mahal) bukan semestinya laluan yang terbaik untuk semua orang. Malah ia tidak lagi menjamin mobiliti sosial. Alternatif yang kurang diberi penekanan ialah TVET, yang sepatutnya mendapat tumpuan, sokongan dan promosi yang lebih besar. Kursus pembangunan kemahiran pendek atau mikrokredential juga harus digalakkan, bukan sahaja di kalangan orang dewasa yang bekerja tetapi juga di kalangan lepasan sekolah.

Untuk mengurangkan kebergantungan pada pinjaman pendidikan dan menjadikan simpanan pendidikan sebagai satu kelaziman sosial, kami juga mencadangkan agar akaun pembelajaran sepanjang hayat (APSH) diwujudkan secara automatik. Pendaftaran APSH automatik ini (opt out berbanding opt in) akan menjadi kaedah utama untuk skim simpanan sukarela yang diberi insentif oleh kerajaan, serta sebarang insentif tunai atau baucar untuk tujuan pendidikan.

Sebagai penjelasan, kami tidak mempersoalkan nilai pendidikan tinggi. Tetapi kita mesti mempertimbangkan semula cara kita mentakrifkan pendidikan tinggi dan cara kita membiayainya. Melangkah ke hadapan, kita harus merangka dasar untuk meningkatkan akses kepada pendidikan berkualiti (pengetahuan, kemahiran dan latihan teknikal), terutamanya untuk golongan yang kurang berada, tanpa mendorong mereka untuk menanggung hutang yang membebankan.

Cadangan-cadangan dasar kami sama sekali tidak menyeluruh, tetapi ia menawarkan corak pemikiran dasar yang baharu yang berorientasikan masa depan, berpandangan jauh dan lebih murah dalam usaha kerajaan meningkatkan akses kepada pendidikan tinggi. Pandemik COVID-19 telah memustahakkan lagi keperluan untuk menangani ketidaksamaan, dan ini merupakan satu kesempatan untuk merangka dasar pendidikan yang lebih baik, terutamanya bagi mereka dari keluarga berpendapatan rendah. Pada pandangan kami, ini sebaiknya dilakukan dengan memikir semula keseluruhan corak pemikiran dasar berkaitan pinjaman pendidikan, pembiayaan pendidikan tinggi, dan naratif yang memihak kepada ijazah tradisional. Kami membayangkan masa depan yang menyediakan peluang pendidikan pelbagai landasan (dan lebih murah), dan yang menjadikan simpanan pendidikan sebagai satu kelaziman sosial untuk menggalakkan pembelajaran sepanjang hayat. Mendasari perubahan corak pemikiran dasar ini adalah peringatan kami bahawa tiada lagi solusi satu saiz untuk semua (one size fits all), tetapi sebaliknya dasar-dasar awam kita patut mensasarkan bantuan yang lebih besar kepada mereka yang paling memerlukannya.

E-mel pandangan atau cadangan anda kepada kami di editorial@centre.my.

#GE15MANIFESTO: What Election Promises Will Be Made On The Minimum Wage?

Malaysia’s current monthly minimum wage is RM1,200, increasing gradually from RM900 back when it was first implemented in 2012. By law, the next revision is supposed to occur this year. There has been talk that the government will raise it to RM1,500 a month – a significant 25% increase. This has naturally generated extremely contrasting reactions, from employers’ sharp objections, to “it’s high time” from worker groups, to divided analysts.

Whether we will see a RM1,500 minimum wage or not, one fundamental thing remains: the way the minimum wage is set and decided is and has been quite opaque. Although there is a stated ‘formula’ for revisions, the actual level of the minimum wage appears to be determined mostly through negotiations amongst key stakeholders, including the Cabinet and members of the National Wages Consultative Council (NWCC).

Yet, knowing how the minimum wage is set is critical to all working Malaysians. For the lowest paid employees, it sets the legal floor for wages and salaries. For informal workers, it stands as a rough benchmark for the minimum they should be earning from their informal jobs.

Times are changing the discussion. As early as 2018, proponents such Bank Negara Malaysia (BNM), Khazanah Research Institute (KRI) and Malaysia Trade Unions Congress (MTUC) have argued for setting the minimum wage at the level of a ‘living wage’, in other words a level which allows for a reasonable standard of living. BNM has estimated this to be RM2,700 for an unmarried individual in Klang Valley.

The push to clearly define the basis for the minimum wage grew further after the government updated the poverty line income from RM980 to RM2,208 in 2020. The pandemic and the trend of dramatic price increases also increased pressures to rethink the minimum wage.

The current policy approach of negotiating a few hundred ringgits’ increment every two years is clearly insufficient. The electioneering practice of simply promising a certain figure as the new minimum wage is also not good enough. Political parties will have to step up their policy game. In a potential election year, we ask political parties, how do they propose to address Malaysia’s minimum wage long-term? What improved promises can we expect on their manifestos?

Promise 1: From Conflicting Aims to A Clear Principle?

Since the Minimum Wage Order* was enacted in 2012, the government has reviewed the minimum wage with advice from the NWCC at least once every two years, as required by the NWCC Act 2011. Between 2012 to 2020, the minimum wage has been raised from RM900 a month for West Malaysia and RM800 for East Malaysia to RM1,200 a month for 56 municipal council areas and RM1,100 a month for other areas (Figure 1). That’s an increase of RM300 over a period of nearly a decade, which works out to an average 3.3% a year, or around an average of 1.5% annually after accounting for inflation. For reference, the average growth of Malaysia’s nominal GDP is around 6.4% during the same period (excluding 2020), or 5.1% in real terms.

*Part 2 of our Fair Work Act Research Series discussed the history of Malaysia’s Minimum Wage Order and explained the institutions behind the minimum wage in Malaysia.

Figure 1: Changes in Malaysia’s minimum wage rates since inception

Source: NWCC Act 2011; Minimum Wage Order

It is not entirely transparent what truly determines the level of the minimum wage. This is perhaps rooted in the very foundations of our minimum wage law which has two conflicting aims: firstly to ensure employees can meet basic needs and secondly, to provide a conducive environment for industrial production.

The first aim, judging by current benchmarks, seems to be of lower priority. Take the Klang Valley. The current minimum wage of RM1,200 is far lower than various ‘basic needs’ estimates, be it BNM’s living wage estimate of RM2,700 for singles, or SWRC’s reference budget level of RM1,870 for unmarried public transport users.

There is a stated minimum wage formula on the NWCC website, which incorporates relevant indicators such as the national poverty line, median income, inflation rate and more. However, judging by the quantum of minimum wage increases over the past decade and the gap between the minimum wage and the living wage, it is hard to say with confidence that the actual minimum wage has adhered to the stated formula.

And so we ask Malaysia’s political parties: What should be the principle or basis governing our minimum wage? How should it be set?

In answering this question, political parties would reveal what they think is the core purpose of a minimum wage. If parties agree that the core purpose of a minimum wage is to ensure that the lowest paid workers can meet the cost of living, the calculation of the statutory minimum wage should be based on a fixed percentage of the national median wage or a formalised calculation of a living wage, or some other clear living costs benchmark. After basic principles are established, then political parties can impress us further if they choose, for example, whether to set different minimum wages by state or region, whether to have specific sectoral provisions, and so on. But the first basic principle for setting the minimum wage is critical.

Setting the minimum wage more firmly and transparently based on a cost of living benchmark would also lend towards more gradual and more forecastable increases. While the mooted figure of RM1,500 is commendable for getting closer to living wage estimates, it is a marked 25% increase from current levels which will be very hard for some companies to bear, particularly in an economy still dealing with COVID-19.

Promise 2: From Piecemeal to Holistic Policy Thinking?

As we argued above, the minimum wage appears to be determined mostly through negotiations amongst key stakeholders. Judging by past media statements vs. the rate of minimum wage increases, it’s fair to conclude that much of the negotiations is driven by pushback from employer groups. Part of the problem here is the patchiness of complementary policy instruments that meaningfully support employers and companies, particularly MSMEs, to make the adjustment towards higher wages. Policy instruments like conditional wage subsidies, for example.

In the absence of holistic and supportive policy instruments, there will always be a high degree of objections to increasing the minimum wage. And so we would like to ask Malaysia’s political parties: how should the country improve the broader policy framework around Malaysia’s minimum wage? What other policy instruments should be implemented?

The question means to shift the policy conversation from debating piecemeal updates of minimum wage figures towards implementing the right policy model for systematic reform. As per Promise 1 above, political parties could offer to update the formula in the Minimum Wage Order to ensure closer alignment with cost of living levels. To accompany that however, complementary measures such as systematic wage subsidies should be designed and added into Malaysia’s minimum wage framework for qualifying employers and companies.

Promise 3: From Limited to Near-Full Coverage?

As digitalisation accelerates labour informalisation, more and more Malaysians are taking up new types of informal jobs, such as e-hailing and delivery gig work. This emerging class of informal workers has increasingly exposed the coverage gap of the minimum wage law. In law, only those with formal employment, whether full-time or part-time, are eligible to earn a minimum wage. While the statutory minimum wage is somewhat of a rough benchmark for informal workers’ salaries, there is no law protecting informal workers from being underpaid by employers even if they work full–time.

And so we ask Malaysia’s political parties: How should the current laws on minimum wage be amended to account for different types of informal workers?

As a start, political parties could provide the right of earning a fair minimum wage to informal workers and those without employment contracts by updating the definition of “employment” in the Employment Act 1955 as well as setting minimum conditions into the Contract Act 1950. Regardless of employment status, anyone who works for an equivalent of full-time hours should earn a salary not less than a minimum living wage.

Conclusion

The media and online ‘debates’ on the precise level of the minimum wage masks fundamental underlying policy questions regarding its purpose, model and coverage that had long been missing in Malaysia’s political discussions. In the run up to the 15th General Election, we hope that some brave and forward-thinking political parties would stop discussing minimum wage as a numbers game but instead go the extra mile to develop, communicate and promise meaningful policy reform.

Email us your views or suggestions at editorial@centre.my

Indebted Generation: Part 4

Last year we began a research series to address the quandary of student debt in Malaysia, and recommended some key policy changes towards resolving problems related to outstanding loans as well as longer term systemic solutions. 

Part 1 of this research series summarises the issues. Since the establishment of Malaysia’s primary student loan institution PTPTN in 1997, RM62.5 billion in student loans have been issued to 3.5 million borrowers. The success of the system hinges on broad and consistent positive returns to higher education. However, upward social mobility from higher education has not been evenly realised, putting pressure on this policy approach.

In Part 2, we advocated 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. Segmenting existing borrowers by their capacity to repay is a key pillar of these recommendations.

In Part 3, we proposed ideas for reforming the way Malaysians finance their higher education. We argued for policymakers to internalise the changing face of higher education and enact policies that evolve with recent trends. This includes diversifying from traditional degrees to TVET and microcredentials, shifting from loans to direct subsidies for students from underprivileged households, and providing individual lifelong education accounts.

In this final instalment, we present findings from our survey of student loan borrowers, which aimed to understand borrowers’ views on student loans and the impact of student loans on their lives. The majority of our survey respondents agreed that their education was worth taking out (and paying off) their student loans, and getting into debt seems to be a ‘necessary evil’ towards achieving tertiary qualifications. Nevertheless, progressive policy recommendations such as direct subsidies to underprivileged students and income-based repayment were strongly supported. At the same time, there appears to be a lack of knowledge on how PTPTN, the biggest loan provider, conducts its borrowings and lendings. These were some key findings, among many others, of our survey which is further detailed below.

About the study

The study was conducted via an online questionnaire, distributed using a convenience sampling method, between 3 August to 17 September 2021. The survey came in both Malay and English versions. 

Since the survey’s sampling method was not stratified random sampling, results must be read with that in mind. Based on the profile of our survey respondents, we estimate that our survey respondents skew urban, but are fairly representative of student loan borrowers on other major demographic parameters such as age and gender. However, we acknowledge that this estimation can only be confirmed with access to a student loan database, which is not publicly available.

A total of 356 responses were collected during the study period of which 53 were rejected due to their status as non-borrowers and another two were excluded due to the respondents’ inconsistent or duplicated information, leaving a sample of 301 responses.

55% of the respondents were female. 73% of respondents were between 25-40 years of age, 19% were between 17-24 years old, and 8% were between 41-55 years old. Ethnically, 71% were Malays, followed by 12% Chinese, 9% Indians, and 5% non-Malay Bumiputera. Geographically, 64% of respondents came from Selangor and Kuala Lumpur.

Demographics of Survey Respondents

Employment, income and financial patterns

The majority of respondents are employed in some capacity. 68% of respondents were full-time employees, while 11% were otherwise employed as part-time employees or freelancers or entrepreneurs; 2% were full-time homemakers. Of those not in employment, 7% were unemployed and 12% were still studying. (Figure 1).

Figure 1: Employment status

With respect to current income, after excluding those who identified themselves as still studying, 9% of respondents stated that they have no regular monthly income, 16% earned less than RM2,000 a month, and 36% earned between RM2,000 and RM4,000 a month (Figure 2). Altogether, 61% of respondents earned below RM4,000 a month.

Figure 2: Current monthly income

A majority of respondents, 67%, were early-career employees with 7 years’ or under working experience. 38% of respondents reported working for less than 3 years, 29% reported between 3-7 years, 11% reported 7-10 years, and 22% reported more than 10 years (Figure 3).

Figure 3: Years of working experience

In terms of perceived income growth (again after excluding those who were still studying), we found that 42% of respondents reported steadily increasing income – a noteworthy finding that reflects positively on career progression and the returns to higher education. However, a significant 44% of respondents reported that their income has been somewhat stagnant since they started working. A minority reported worrying income trends: around 10% reported unstable income, 2% reported no income, and 3% reported decreasing income (Figure 4). 

Figure 4: Respondents’ income trend

Also noteworthy: 52% of respondents reported that the Covid-19 pandemic had little to no impact to their income, while 13% even saw their income increase during this period. However, among those whose income had been disrupted, the losses were substantial; 8% saw their income decrease by at least 30%, and another 11% reported experiencing a job loss (Figure 5).

Figure 5: Impact of pandemic on income

A small majority of respondents, 54%, have at least one financial dependent such as a non-working spouse, children or parent(s) (Figure 6).

Figure 6: Number of financial dependents

Other than student loans, approximately 67% of borrowers report providing some level of financial support to their parents. 45% have car loans to service, and 30%  have credit card debts to pay. 25% have housing loans, and 21% have incurred personal loans (Figure 7).

Figure 7: Type of financial obligations

What they borrowed for, and how much

The vast majority of respondents (74%) took out just one student loan, though a sizable number took out two student loans (25%) and a minority took out three student loans (1%).

Figure 8: Number of educational loans per respondent

The loans were mostly used to fund a bachelor’s degree, followed by pre-u and diploma (Figure 9).

Figure 9: Courses funded by student loans

A majority of respondents studied in public higher education institutions (IPTA) compared to private higher education institutions (IPTS) and overseas institutions. The share of overseas education amongst respondents is higher for post-graduate studies and professional/technical certification (Figure 10).

Figure 10: Type of institution by level of course type

Interestingly, respondents indicated a high completion rate of their study programs. The completion rate for bachelor’s degrees was 88%; only 2% failed to complete their programs while the remaining 10% of respondents were still studying (Figure 11).

Figure 11: Course completion rate

In terms of loan providers, PTPTN was by far the largest source of student loans. 82% of respondents reported borrowing from PTPTN, followed by 14% from MARA and 8% from state governments (Figure 12).

Figure 12: Sources of student loan

In terms of loan amount, 82% borrowed under RM60,000,which is consistent with the average loan size stated by PTPTN’s chairperson. 10% of respondents borrowed less than RM15,000 41% borrowed RM15,001 to RM30,000 while another 31% borrowed RM30,001 to RM60,000; only 7% borrowed more than RM100,000 (Figure 13).

Figure 13: Student loan amount

In terms of the length of time to fully repay their student loans per their loan agreement, 34% stated that they have to pay it off within 5-10 years and another 34% stated they will have to pay it off within 10-20 years. 16% reported they have to pay their debts within 20-30 years and the remaining 8% reported that they will take more than 30 years to pay off their student loan (Figure 14). For the record, PTPTN allows borrowers to restructure their loans which can extend the repayment period until the borrower reaches 60 years of age.

Figure 14a: Student loan tenure

Figure 14b: Student loan tenure by total loan amount

Borrowers’ monthly repayments depend on their loan size and repayment period. A large majority of respondents, 72%, pay between RM100 and RM300 a month. Of these, 8% pay less than RM100 a month, 45% of respondents pay between RM100 and RM200 a month, 27% pay between RM200 and RM300 a month, 11% pay between RM300 and RM400 a month, 5% pay between RM 400 and RM 500 a month, and 4% pay more than RM500 a month (Figure 15).

Figure 15: Monthly loan repayment amount

When borrowers’ income is commensurate with their monthly repayment and debt amount, student debt is less of a problem. Except for those who reported having no monthly income currently, monthly repayments are generally consistent with borrowers’ income level, i.e. borrowers with higher monthly loan instalments tend to earn at higher levels (Figure 16). There is however a segment of graduates earning less than RM2,000 or with no income that face considerable monthly repayments. In the highest income group, curiously 38% of those earning more than RM7,000 were paying RM200 or below in monthly repayments – another argument perhaps for setting repayment amounts based on income.

Figure 16: Monthly loan repayment by respondents’ income

41% of respondents have negotiated to restructure their loan repayment at least once – a surprisingly high number. The greater the loan size, the more likely that borrowers will restructure their loan repayment. Roughly 75% of respondents who borrowed more than RM100,000 restructured their loan repayment, followed by 46% of those who borrowed between RM60,001 to RM100,000, 40% of those who borrowed between RM30,001 to RM60,000, 40% of those borrowed between RM15,001 to RM30,000, and only 20% among those who borrowed less than RM15,000 (Figure 17).

Figure 17: Loan restructuring by loan size

In terms of their income, surprisingly, there were more respondents who restructured their loans amongst the highest income group (49% amongst those making greater than RM7,000 a month) compared to the lowest income group (26% amongst those making less than RM2,000 a month) (Figure 18)*. This may be attributed to two possible reasons: those who have higher income could perhaps afford to take advantage of PTPTN discounts for large sum repayments and so could restructure to settle their loans quicker, while those who have the least income defaulted rather than restructured their loans.

*This pattern holds even when we compare the second highest income group and the second lowest income group. The exception is those who reported no monthly income – about 50% of them restructured their loans.

Figure 18: Loan restructuring by respondents’ income

In terms of repayment rate, which has been a thorny issue generating sharply divergent headlines, our survey mostly corroborated PTPTN’s statements: while a small minority defaults, a majority of borrowers do repay their loans. 60% of respondents can be categorised as having good standing in that they have either completely repaid their loans or are paying as scheduled. 20% can be categorised as inconsistent payers and 8% can be categorised as hardcore defaulters who never repay their loans. 12% of respondents were not yet scheduled to begin repayment (Figure 19).

Figure 19: Repayment status amongst respondents

Taking a closer look into defaulting patterns, our findings are largely confirmed by PTPTN’s own survey (mentioned in this publication here) that defaulters tend to come from low-income groups. For those who made inconsistent payments, 46% of them reported having no current income or earned less than RM2,000 a month and another 29% earned between RM2,000 and RM4,000. For those who never made repayment, 36% of them reported no monthly income currently and another 32% earned less than RM2,000. Nevertheless, there is a sizable percentage of those making inconsistent payments from high income groups: 14% of them earned between RM4,000 and RM7,000, and another 12% of them earned more than RM7,000 a month (Figure 20).

Figure 20: Repayment status by respondents’ income

To better understand motivations behind paying or not paying off student loans, we asked respondents to check a list of statements that explain their actions. The top three reported reasons why borrowers of good standing pay their loans are: they feel responsible for what they owe (94%), they do not like to be in debt (93%), and they want to avoid penalties (87%) (Figure 21).

Figure 21: Motivations for consistent repayment

Among those who did not pay or were paying inconsistently, the top three reported reasons for  their payment behaviour were: they do not have enough to cover their cost of living (75%), they were waiting for announcement or election promises to discount their student loan (73%), and they believe it is unfair to have to pay this much for their education (71%) (Figure 22).

Figure 22: Motivations for inconsistent payment/defaulting

First Generation Student Loan Borrowers vs. The Rest

59% of respondents identified as first-generation tertiary graduates (‘first gens’), meaning that neither parent possesses a university degree. While this testifies to the benefit of student loans in enabling first gens to pursue higher education, they also appear to earn lower incomes, as a group, compared to borrowers with parents that have higher education qualifications.

There was a higher proportion of first-gens earning below RM2,000 (20%) compared to non first-gen respondents (11%).  There were also more first-gens who reported having no monthly income currently compared to non first-gen respondents. Bottom line: even though attaining higher education is important, parents’ educational qualifications are also a determinant to a borrowers’ earning capability.

Figure 23: Income of first generation borrowers versus others

Impact of, and Perception on, Student Loans

In addition to their profiles and borrowing, we also asked respondents how they perceived the worth of student loans, the impact of student loans on their finances, and whether today’s student loan policies should be continued or reformed. 

When we asked respondents if they felt that the education or qualification that they received was worth their student loans, a majority of 59% reported that it is worth it (Figure 24). Roughly 22% reported feeling neutral and the remaining 20% indicated that it was not worth it.

Figure 24: Perception of education’s worth compared to student loan

When we examined the data according to income, unsurprisingly we found that those who earned less are more likely to report that their higher education is not worth the loan compared to those who earned more. Borrowers who earned less than RM2,000 a month or had no monthly income currently were more likely to report that their education is not worth the student debt incurred compare to respondents earning at higher levels (Figure 25).

Figure 25: Perception of education’s worth by respondents’ income

When we compare perception of education’s worth by the types of institutions for bachelor’s degree – the most popular course amongst our respondents – we found that those in local public higher education institutions (IPTA) are more likely to report that their education is worth the loan compared to their peers in local private higher education institutions (IPTS). The latter was also slightly more likely to express that their education is not worth the loan. Also noteworthy: those who studied in overseas higher education institutions were more strongly inclined to report that their education is worth the loan compared to those from local higher education institutions.

Figure 26: Perception of education’s worth by type of educational institution (degrees only)

Somewhat surprisingly, relatively few respondents reported experiencing loan penalties (Figure 27). Only 11% said they experienced being unable to travel due to immigration blacklists for not repaying their student loan. 4% reported being sued for not repaying student loans, and another 2% reported that they declared court bankruptcy for not repaying their student loans. 24% reported difficulties in getting a bank loan because of their student loan repayment status affecting their creditworthiness scores.

Figure 27: Penalties faced by loan borrowers

To better understand the different ways student debt affects borrowers’ lives, we asked respondents about the impact of student loans on their finances and life plans. 59% reported that student loans contributed to financial stress, 57% reported that student loans contributed to a delay in purchasing a home, and 52% reported that student loans contributed to them postponing savings, including emergency savings and retirement savings (Figure 28). 46% of respondents reported that student loans have contributed to them not starting a business or pursuing risky ventures, while 42% reported that student loans have contributed to them delaying marriage or having kids.

Figure 28: Effect of student loans on life choices

We also asked respondents what they think of some ideas to reform student loan policies. Income was a strong theme. 82% of respondents agreed that student debt is not a problem if graduates earn higher wages. Relatedly, there is strong support from respondents, 81%, to only begin student loan repayments after reaching an affordable level of income, a policy which we advocated in Part 2 of this research series. More than two-thirds of respondents, 77%, agree that underprivileged and overburdened borrowers should have part of their student loan forgiven, a proposal that we also pushed for.

Figure 29: Support for income-based repayment and partial loan cancellation

Policy ideas to impose more restrictions on student loans did not resonate with the respondents, going against our policy recommendations in this area. A majority of respondents disagree that criteria for student loans should be tightened and given for certain courses only (69%) or certain institutions only (71%), which were two of the policy recommendations we advocated in Part 3 of this research series. A small majority of respondents also reacted negatively to our policy recommendation that there should be less student loans for university degrees, and more for technical and online courses including micro-credentials (52% disagreed). That said, further studies that include a more representative sample, including more of TVET graduates, may present findings that are less skewed towards university degrees.

Figure 30: Support for loan reform proposals

77% of respondents agree that youth should not need to get into debt to attain higher education, and an even bigger majority, 82%, said the poor should not have to do so. A majority of respondents, 59%, disagreed with the statement that an individual person or family is fully responsible to save up and pay for their own higher education. Given these numbers, we would be interested to see if borrowers feel that the family should be partially responsible for paying the costs of higher education – perhaps in a future study.

Figure 31: Views on higher education financing

On the question of fiscal affordability, about two-thirds of respondents, 69%, think the country can afford to make higher education free for everyone, which in our view reflects the gulf between policymakers (who tend to be more fiscally mindful/conservative) with the general public.

Figure 32: Views on affordability of free higher education

However, many respondents were not aware of how PTPTN – the biggest loan provider – operates (Figure 33). Only 39% were aware that PTPTN borrows from financial institutions and markets. More than two-thirds of respondents, 77%, thought that PTPTN is completely funded by the government and taxpayers, and only 36% were aware that the Malaysian government guarantees PTPTN’s debts. About 40% thought that PTPTN is completely funded by the ongoing collection of outstanding loans. (We covered how PTPTN operates in Part 1).

Figure 33: Knowledge of PTPTN’s funding base

Conclusion

We began this research series by outlining the major problems with student loans as the main policy approach to finance one’s higher education. As have been pointed out elsewhere, a major issue is the uneven returns from higher education. This is borne out by our survey where less than half of respondents are earning RM4,000 a month and above.

Due to uneven returns from higher education, we hypothesised that graduates are questioning the worth of their tertiary education relative to their loans. This was somewhat supported by the survey, where a small majority of respondents, 59%, agreed that their education was worth the loans incurred. Borrowers whose income is lower than RM2,000 a month were especially likely to question the worth of their tertiary education. 

We tested our other assumptions on related facets such as payment behaviour, level of loan restructuring, how student loans affect stress and life plans as well as the extent of knowledge on how PTPTN is financed; these are summarised in Table 1 below. While we were mostly validated regarding the effects of income on some of these hypotheses, some results were less negative/severe than we expected.

Table 1: Assumptions tested and indications from the survey

Apart from the assumptions above, we also tested our policy perspectives against borrowers’ views via the survey (Table 2). Some of our policy recommendations did not find favour. In Part 3, we had advocated to tighten conditions and limit student loans to certain courses or institutions with proven track records, but respondents rejected this proposal by a huge margin. We had also advocated to extend more student loans for technical and vocational (TVET) and microcredit courses but respondents were not enthusiastic about reducing loans for traditional degrees in favour of funding more TVET and microcredit courses.

However, other proposals evidently struck a chord among the respondents. There was strong endorsement to permit borrowers to begin repayment only after they reached an affordable level of income i.e. income-based repayment. Respondents also supported our policy view that lower income households should not have to incur debt to attain higher education, suggesting an appetite for progressive reforms. Our policy recommendations that align with such a vision include providing targeted and partial student loan cancellation for low income borrowers as well as direct subsidies, rather than loans, to low-income students.

Table 2: Support for our loan policy recommendations

In essence, decisions on how to improve today’s educational financing policy ought to be shaped by two key drivers: the real returns of higher education and the sustainability of PTPTN’s funding structure. 

Acknowledging and identifying the unevenness of returns from higher education would help to set the path towards policies that (i) really help to level the playing field for low-income households/students, and (ii) puts the right level of funding and quality assurance support in non-traditional forms of higher or continuing education such as TVET and microcredentials.

Acknowledging the (lack of) long-term sustainability of PTPTN’s funding structure would help to set the path towards policies that (iii) moves away from debt towards further supporting/subsidising the behaviour of early saving for every Malaysian’s lifelong education, and (iv) institutionalises greater transparency, accountability and oversight in funding bodies such as PTPTN.

Given the changes occurring in employment and higher education, we believe that the time is ripe for more evidence-based policymaking and research-led inquiry on student loans as a policy instrument, as well as alternative paths forward. With the General Election in Malaysia’s imminent future, we look forward to seeing and contrasting the range of policy proposals from the nation’s major political parties on this highly important topic.