By Callistus Antony D’Angelus
OPINION: The report that the Employees’ Provident Fund (EPF) will reconstitute members’ contribution into three accounts, where 10 percent of the members’ contributions would be in Account 3 which can be withdrawn at any time is a step backwards for social protection in the country.
Much has rightfully been expected of the unity government, which has promised a reform agenda, and this falls short of reform which benefits the public in the real sense.
This is no different from the irresponsible actions of a previous administration that allowed for EPF withdrawals during the Covid pandemic to alleviate the cost-of-living crisis at that point in time.
The individuals who would withdraw from the EPF accounts, which should for their retirement, are those who would likely be in most need of savings when they retire. The actions of the EPF here is not only irresponsible towards contributors but also towards the economy more generally.
What would happen to individuals who retire and have inadequate savings to tide themselves over during their retirement? The burden will ultimately fall on the state in many ways, shapes and forms. The EPF should consider the socio-economic implications of such a policy decision.
The government should look towards the sufficiency of the minimum wage, currently at RM1500 per month, which is clearly inadequate. The minimum wage should be at the level of a living wage, which according to the estimates of Bank Negara for an individual living in Kuala Lumpur in 2016 was RM2,700 per month. We can only speculate as to why Bank Negara has not updated the living wage estimates since then. Clearly, the central bank is not functioning independently and above party politics.
The wealth and income divide as a consequence of policy decisions such as that made by the EPF, and lack of policy decisions made otherwise, will only widen.
The Minister of Human Resources should come out to take a stand on the social protection mechanisms in place, and the adequacy of such mechanisms.
Clearly the Malaysian people, and in particular the B40 and M40 communities, continue to be disregarded and discriminated against. It will all eventually count at the ballot box.
Note: Callistus Antony D’Angelus is the International Labour Advisor of Social Protection Contributors Advisory Association Malaysia (SPCAAM)