PETALING JAYA: PKR’s Subang MP Wong Chen says his objection to allowing people to withdraw from their Employees Provident Fund (EPF) Account 1 is because depositors should not be expected to dip into their retirement savings to help themselves.
Describing the move as an “overkill,” Wong said the ultimate task of saving the people from this once-in-a-100-years crisis is the job of the government.
Previously, Finance Minister Tengku Zafrul Aziz announced that eight million EPF contributors would be able to withdraw up to RM10,000 each – a total of RM70 billion – in 2021 from their savings.
In a lengthy response to former prime minister Najib Razak, who has been pushing for this move, Wong said the estimated RM70 billion toll on the EPF would be “too much of a leap”.
“I empathise with their (people’s) plight but more damage than good will come from this in the medium and long term.”
Najib had suggested how the EPF can make available sufficient funds without having to raise or borrow more money by liquidating government bonds. He had also proposed other ways the EPF can replenish the funds used to facilitate these withdrawals.
Wong said he appreciated Najib’s motivation in wanting to help the people but had a different view of the solutions.
He believed that spending money to contain the pandemic is what will save the economy, rather than an increase in spending from EPF withdrawals.
“The second priority is to ensure companies receive sufficient wage subsidy, at least 50% and not the current 25%, to ensure workers can keep their jobs, and provide handouts to those who have lost their jobs and fallen on hard times.”
Cash injections through EPF withdrawals, Wong said, should be a “third” and “distant” priority.
Wong urged the government to review its priorities and transfer RM19 billion of the “bloated” development expenditure and channel it to public health, vaccines, wage subsidies and handouts.
He also said it was important for EPF to continue to invest conservatively to ensure steady dividends and that asking the retirement fund to pursue riskier investments was unwise.
“You can’t do that because the majority of the money originates from ordinary hardworking depositors. It is morally wrong to take more risks with their hard-earned money.”
Wong also voiced doubt that the sale of government bonds alone could fund the withdrawals amounting to RM70 billion.
“Let me conclude by reiterating that this RM70 billion EPF withdrawal policy is overkill.”