THIS is the best time for the Government to raise awareness of financial literacy among the public, said the Federation of Malaysian Consumers Association (Fomca).
“Many have lost their jobs due to COVID-19. For those who managed to retain their employment, they see their incomes slashed. There is a lot of uncertainty out there.
“Surprisingly, our survey conducted recently found that savings among Malaysians have increased. People are worried about their future,” its secretary-general Datuk Paul Selvaraj told FocusM.
Under Budget 2021, Finance Minister Tengku Datuk Seri Zafrul Tengku Aziz announced that the Government would allow Account 1 withdrawals for those who are economically affected due to the pandemic.
The proposal would allow a maximum of RM500 monthly withdrawal for the next six months. The maximum that can be withdrawn is RM6,000.
However, many have panned the idea saying that a lot of Malaysians, especially the B40, have little savings in EPF.
Selvaraj said in general, Malaysians do not have enough savings and tend to spend more.
However, the pandemic have forced many to abandon purchasing luxury and big items, thus diverting funds to essentials instead.
“The perennial problem is Malaysians don’t save as much, leaving them vulnerable to tough economic situations.
“Our survey even before the pandemic showed that 34% of Malaysians can only survive three months after losing their jobs,” he said.
Selvaraj added that financial literacy campaign should include all income groups, especially the B40.
“With better financial education, we can cope better during tough times. This pandemic has shown the importance of being prepared at all times,” he said.
However, Selvaraj acknowledged that one of the problems in getting Malaysians to save was income inequality, compounded with soaring cost of living.
“And this is where the Government should intervene. They should look into reducing prices of food, housing, transport and other essentials,” he remarked.
On how to cope after the pandemic, Selvaraj said many are worried about job security and the Government should work towards addressing it.
“Based on our survey recently, we found that job security has become number three concern among our respondents. Before the pandemic, job security was one the items at the bottom of the list.
“Therefore, the Government should look into this. One way is to invest in reskilling and upskilling our workforce, particularly those who have lost their jobs.
“We need more people to adapt to the new model of economy which will come after the pandemic is over,” he added. – Nov 16, 2020
