Fiscal balance, civil service efficiency

KUCHING: The allure of civil service, known for stable incomes and career security, plays a significant role in the economic landscape.

Universiti Malaysia Sarawak (UNIMAS) economist Dr. Dzul Hadzwan Husaini said that a workforce drawn to public sector employment plays a crucial role in ensuring continuous and efficient delivery of essential services, which is vital for overall economic stability.

“Pension benefits are a key incentive, encouraging seasoned professionals to dedicate themselves to public service,” Dr. Dzul told New Sarawak Tribune today (Jan 26).

However, he cautioned that without a strong pension scheme, there is a risk of losing talent, leading to a workforce that is less motivated and dedicated. This could hinder innovation and productivity, impacting the government’s ability to address evolving societal needs.

He also highlighted the potential economic repercussions of a reduced pool of skilled professionals in the public sector, such as increased dependence on private enterprises, which could strain resources and degrade service quality.

Specifically focusing on the military sector, Dr. Dzul raised concerns about national security. The declining appeal of military service to newer generations could lead to a shortage of skilled personnel, weakening the nation’s defense capabilities. This may necessitate increased spending on external defense resources, diverting funds from other critical areas.

He then argued that eliminating pension schemes should be a last resort.

“A robust commitment to emoluments and pensions becomes less vital with a well-functioning tax system. With an efficient tax system, government expenditures can be replenished, reducing the need for drastic actions like removing pension schemes,” he added.

Dr. Dzul warned that while abolishing pension schemes might improve the fiscal situation short-term, it’s a temporary solution. Without corresponding changes in economic policies and governance, fiscal pressures will persist. The removal of pension schemes is not a long-term fiscal solution and may harm public servants’ welfare over time.

“Fiscal pressure arises from inadequate long-term income growth, not pension schemes. The primary issue is our declining revenue, intensifying financial commitment strains,” he said.