Abolishing BR1M will ‘punish’ the poor, says Najib

Najib Razak denied Mahathir’s claims that the money for BR1M was sourced from “stolen money”. (Bernama pic)

PETALING JAYA: Former prime minister Najib Razak has questioned his successor Dr Mahathir Mohamad’s decision to reduce and eventually abolish the 1 Malaysia People’s Aid (BR1M), warning it may “punish” the poor and increase the income gap between the rich and poor.

Najib in a Facebook post was responding to Mahathir’s remarks in an interview with The Malaysian Insight that the cash aid would gradually be reduced before it is eventually scrapped.

Putrajaya had earlier this month replaced BR1M with the Bantuan Sara Hidup (BSH), which saw almost 4.1 million people receive the cash aid totalling RM1.6 billion.

Najib, who was former finance minister, also denied Mahathir’s claims that the money for BR1M was sourced from “stolen money” saying it was sourced from rationalisation of subsidies and the now abolished goods and services tax (GST).

“The rich benefit more from blanket subsidies while the GST collection is more than SST because the rich consume more and pay more,” he said, adding GST also reduced tax evasion, the flow of illicit funds and collected money from the “shadow” economy.

These monies, he said, were returned to the bottom 40 (B40) in the form of BR1M, which increased in amount over the years because GST collection also increased as the country’s economy grew.

He added this narrowed the gap between the rich and poor and this was demonstrated by a lower Gini coefficient (used as a gauge of economic inequality) of 0.40 in 2016, the lowest in the country’s history.

Najib noted that the country’s gross domestic product (GDP) growth for the second quarter decreased to 4.5% from 5.4% in the first quarter while unemployment also increased.

Some economists were even predicting an economic crisis amid lower commodity prices since the May 9 polls, he noted.

“This is a time when the poor should be helped not punished.

“What is wrong with taking money from the rich and tax evaders to give to the poor?”

He questioned if PH had forgotten its manifesto promise to continue BR1M and said that it seemed Putrajaya was prioritising the rich, tax evaders and those involved in the shadow economy rather than the poor.

He added that he was worried about the income gap between the rich and poor, which was reduced during his administration, will now increase to a high level as had happened in Mahathir’s first stint as PM.