IT is time for the Government to expand social security net provided for workers instead of relying on the latter’s own retirement savings to weather an economic storm.
“Let’s provide workers with a piggy bank instead of relying on them to utilise what’s left of their savings. The Government must broaden social security net,” PKR MP Nurul Izzah Anwar told FocusM.
Yesterday, EPF chief executive officer Tunku Alizakri Alias told The Malaysian Reserve that the organisation would be selling some of its assets and rebalance its portfolio to make billions available to contributors in need of cash due to the economic downturn.
He also said that EPF would need almost RM45 bil by year-end to dish out cash payments to its contributors, via the i-Lestari and i-Sinar programmes.
However, Alizakri did not offer specifics regarding the liquidation plan except that the fund would focus on assets that “best suit” its long-term strategy.
In EPF’s defense, Nurul Izzah said the retirement fund has been transparent in disclosing the risks associated with monetising its assets.
“It will certainly reduce future dividends for its many contributors,” she said.
While the PKR leader acknowledged that these were unprecedented times, she reiterated that short-term solutions should always be balanced with potential long-term damage of any decisions made.
“It should be universally acknowledged that the people’s piggy bank (Account 1) should be used only as a last resort,” said Nurul Izzah.
Contributors’ savings affected
Offering solutions, the Permatang Pauh lawmaker urged the Government to increase the quantum for COVID-19 aid to help those affected by the pandemic.
She added that the Government should also increase its investments in healthcare, continuity in education and provide job security.
“We should also invest more in emerging digital technology, renewable energy and other green initiatives.
“In addition, let’s do away with political interference in government-linked investment companies (GLIC), which will benefit our future,” said Nurul Izzah.
On related matter, Parti Sosialis Malaysia (PSM) secretary-general A Sivarajan said whenever EPF money was used, it is always the contributors who receive the short end of the stick.
“For years, EPF has been used to bailout government-linked companies (GLC) and other ventures. Contributors are left in the dark on such matters and told to accept whatever low dividends given,” he said.
On the Account 1 withdrawal, Sivarajan said he was even against the Account 2 withdrawal as it would impact contributors’ future retirement savings.
Tax MNCs, GLCs
“If you keep RM6,000 in EPF for 25 years, it would yield about RM22,000 in savings, with dividends of 5.4%.
“For the M40 who retire with RM500,000 savings in EPF, RM22,000 is not much. However, imagine the plight of those who only earn a minimum wage with savings of RM50,000 or so.
“So, it’s better to leave the money there to ensure sustainable savings when one retires,” he said.
Offering solutions, Sivarajan urged the Government to impose a progressive wealth tax , where the revenue generated can be channeled directly to the needy.
He added that the Government should also remove tax holidays given to multinational corporations to generate more revenue.
“And our government-linked companies (GLC) should play a bigger role now. The Government should impose a crisis solidarity tax on them to help out during this trying times,” said the PSM leader.-Nov 18, 2020.
