Tengku Zafrul: Further EPF withdrawal perpetuates "vicious cycle", could see future generations taxed more
22 Jan 2022 09:13am
Finance Minister Tengku Zafrul Tengku Abdul Aziz cautioned that further EPF withdrawal will burden future generations. - Photo by Muhammad Hafiz Adnan.
Tengku Zafrul stressed that the EPF was not designed to be a bank but to ensure employees have another means of savings when they retire from the workforce.
Citing recent statistics released by EPF, Tengku Zafrul pointed out that further withdrawal would also hurt contributors from lower-income households that have little to none in terms of retirement savings.
“When we look at the statistics, we get worried especially for the B40 (households) or the vulnerable sector because when they retire they need money to live and right now if you have less than RM250,000 (of EPF savings), means you live about RM100 a month so that is not feasible when they retire.
"So that is the main concern because if they don't have enough money for their retirement, then the government have to come in but when the government has to come, it is actually the rakyat that has to come in.
"That means that their kids, their grandkids will have to be taxed more to support that. We worry when we don't have that, where the government also can not do that so, who is going to help (the people)?
"It is actually a vicious cycle because we have to look at it in totality,'' he said.
He further explains that for a “win-win” situation to exist on the EPF debacle, the government must come up with more ways to help those in need and that no further emergency withdrawal facility from the EPF is allowed.
"So the government has to play the role to help the people that need the support, not to ask them (the people) to use their own money to support themselves. That is not the right way,’’ he said.
To date, some RM101 billion have been withdrawn under the EPF's i-Sinar, i-Lestari and i-Citra facilities since the start of the pandemic.
However, recent data released by EPF also shows that the withdrawal had left 6.1 million members or nearly half of the fund's contributors with less than RM10,000 in their account.
From that number, 3.6 million members have less than RM1,000 of savings.
The EPF has set RM240,000 as the minimum amount that members should have when they reach the age of 55.
When asked further on his thoughts of certain parties, even those from within the government structure, lobbying for more EPF withdrawals, Tengku Zafrul simply answered that he would not compromise on his values and would rather resign if forced to make the "wrong" decision.
“To me, if it is wrong, then there is no compromise. I would resign rather doing the wrong thing. Not on this (EPF withdrawal) but on anything that is wrong, as a principle,'' he said.
Previously, Tengku Zafrul has stated the government’s sacred responsibility to safeguard the EPF retirement system, which is based on mandatory contributions from employees and employers.
Tengku Zafrul also mentioned that previous withdrawals mooted back in 2020, was made possible after careful considerations and thorough financial and economic evaluation.
ENDS
