Malaysia Overdue For Public Service Reform

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Malaysia stands on the precipice of overdue public service reform.
While the spotlight often falls on pension reforms as a solution to rising government debt, the real crux of the issue lies in the broader question: What does the future hold for Malaysia’s public service?
Demystifying Malaysia’s bloated public service
Despite having 1.6 million public sector employees, the government is facing labour shortages to deliver adequate public services such as education, healthcare, and emergency services.
For those complaining about Malaysia’s bloated civil service yet demanding better public services, we must know that not all countries define civil service the same way.
Our definition of civil service includes all public sector employees, whereas many countries only cover government administrative officers.
For example, in 2023, the UK had around 529,000 civil service employees, while the total public sector workforce, including those in education and the National Health Service (NHS), was around 5.9 million people.
If similar calculations exclude public sector teachers, healthcare workers, police, and military personnel, Malaysia’s civil service headcount will be comparable to the UK.
Creation of a new problem to avoid old ones
Nevertheless, decades of public and political pressure to trim the civil service has prompted a cut in public service funding.
Instead of hiring more public service employees, taking on “temporary” contract workers is increasingly important in government recruitment to meet workforce demand and cope with rising public expenditure.
One main reason is that hiring full-time public sector employees is costly in terms of salaries and pensions.
When cost becomes the primary concern, any move to expand public services is unlikely to be approved by the cost-concerning central agency, public services department (JPA).
But hiring contract workers is not cheap either; public spending on contract workers makes up RM4.3 billion, or 1.4% of total operating expenditure in the 2024 budget.
The bulk of it comes from the health ministry (RM2.64 billion), the rural and regional development ministry (RM666.6 million) and the higher education ministry (RM438.69 million).
As a result, overlapping job scopes and disparities in compensation between contract workers and employees create new problems while avoiding old and difficult ones.
Overlooked structural deficiencies and the way forward
As seen in our public healthcare system and soon in education, the issues plaguing our public service today are structural.
It goes beyond the question of whether to raise public service employees’ salaries or do away with newcomers’ public pensions.
With the inherent belief that public service employment is an “iron rice bowl”, those with performance and professionalism issues are often reassigned elsewhere rather than face disciplinary action.
Over time, our public services deteriorate as a result of reduced public service funding, growing public and political pressure, and an ineffective disciplinary process.
The proposal of a new public service remuneration system might better reward public service employees, but it does not address any systemic structural problems.
At this point, we need to reform the entire public service system instead of making piecemeal changes.
Policymakers must realise that public services are the foundational structures of our institutions.
Directing tax collections to public services ensures equitable access to quality digital, education, healthcare, transport, social and security services for everyone.
In other words, the government should prioritise strengthening its public service delivery capability.
To truly transform our public service, we must acknowledge that centralised human capital planning under JPA has stifled innovation and autonomy within ministries and agencies.
Past efforts to add the National Institute of Public Administration (Intan) and the Malaysian Administrative Modernisation and Management Planning Unit (Mampu) have only added layers of bureaucracy without addressing the core issue.
We should decentralise human capital planning to empower ministries and agencies to tailor their recruitment, management, and disciplinary procedures to their specific needs.
Meanwhile, JPA, Intan, and Mampu can handle research and development, capacity building, and cross-unit coordination, respectively.
Ultimately, this public service delivery model calls for a clear separation of roles among JPA, Intan, Mampu, ministries and agencies.
JPA, Intan and Mampu will focus on measures to foster accountability, efficiency and collaboration while ministries and agencies can get their human capital to provide better public services.
It aims to move away from the entrenched notion of public service employment being an “iron bowl” to one in which Malaysia’s most brilliant professionals can serve the country.
In conclusion, Malaysia is at a critical juncture where bold and comprehensive public service reform is imperative.
We can create a public service system by and for Malaysians by addressing structural deficiencies, empowering ministries and agencies and encouraging accountability.
It is time for radical reform to create a more effective, efficient and equitable public service.
While reform may seem onerous, the benefits far outweigh the challenges.
The views expressed are those of the writer and do not necessarily reflect those of MMKtT.

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