THAT China now grapples with a raging Omicron wave is testament that the economic devastation felt over the past three years from the pandemic remains very much unabated even at global level.
The re-opening of the Malaysian borders effective April 1 will not be an instant cure to remedy economic ills that have been biting hard into the daily lives of many ordinary Malaysians, burning big holes in their pockets and leaving many still searching in vain for employment.
Hence, it appeared “sweet” when Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz took a swipe at UMNO lawmakers for insisting on allowing Employees Provident Fund (EPF) contributors to make further withdrawals of up to RM10,000 to help tide them over in the current challenging environment.
To re-cap, EPF members have previously been given access to up to RM71,000 of their pension funds via three special withdrawal programmes – namely i-Lestari, i-Sinar and i-Citra – which came up to RM101 bil.
While this has impoverished 6.1 million EPF members, or 48%, of those age under 55 now having balance of less than RM10,000 in their accounts, Tengku Zafrul further pointed out to the dismay of EPF members who did not make any withdrawals that the retirement fund could have declared a higher dividend rate of 6.7% instead of the 6.1% announced recently if there were no outflows.
“If a (further) one-off withdrawal of RM10,000 is allowed, the number of eligible members who would make withdrawals is expected to reach 6.3 million involving additional withdrawals amounting to more than RM63 bil,” he projected.
“If the additional withdrawals were allowed, the EPF will have to carry out portfolio balancing, and the impact may be more than the withdrawal value of RM63 bil,” he contended in his winding up debate on the motion of thanks to the Royal Address for the Ministry of Finance in the Dewan Rakyat yesterday (March 14).
This is considering that the EPF will need to sell more overseas investment assets in volatile market conditions, especially with the ongoing Russia-Ukraine crisis halting domestic investment for the short and medium term for three to six months.
While it is a welcome move for Tengku Zafrul to be transparent, one cannot help wondering if there is an ulterior motive for him to publicly reveal the bitter truth to the 5.3 million contributors who have never withdrawn their savings through any withdrawal scheme previously but were subject to receiving lower returns on their savings.
This is because truth like this is often swept under the carpet and moreover, the official rate of 6.1% was already above the expectations of many economists and market observers.
While those who did not make the withdrawals can gladly accept the lower 6.1% rate as a form of national service for their less fortunate compatriots, they may never be able to accept the fact that the core problem is rooted to the inefficiency of the Government machinery in the first place.
The Treasury could have rolled out sufficient financial aid to those whom were badly impacted by the adverse effect of lockdowns or loss of employment.
Above all else, one also wonders if there is a political agenda in Tengku Zafrul’s revelation given that he is close to ex-prime minister Tan Sri Muhyiddin Yassin, whose Perikatan Nasional (PN) coalition only won three seats in the recent Johor state election. – March 15, 2022
