KUALA LUMPUR: The Malaysian Trades Union Congress (MTUC) has urged the government to empower the Welfare Department and relevant agencies to step up their financial assistance to workers hard hit by the Covid-19 pandemic.
It said this should be the approach adopted instead of dipping into the Employees Provident Fund (EPF) to aid workers hard pressed due to the coronavirus impact.
"With ample financial liquidity in the country, the government should source for funds, including obtaining soft loans from EPF to help workers, especially the 600,000 who have lost their jobs so far, instead of using their meagre EPF savings for the purpose," said MTUC secretary-general J.Solomon.
He said that the MTUC was shocked to learn that EPF had approved withdrawals from 3.5 million contributors, amounting to RM1.66 billion under the i-Lestari scheme which was announced by Prime Minister Tan Sri Muhyiddin Yassin in March.
The 12-month scheme allows contributors to withdraw RM500 monthly from Account 2 to help ease their cash flow.
"The huge number of i–Lestari applicants simply shows how cash-strapped the workers are, not necessarily just because of the Covid-19 pandemic," he said.
Solomon said while the government would undoubtedly claim that EPF has the financial strength to absorb billions of ringgit in withdrawals for the next 12 months, it must not continue to be in denial of the fact that contributors would suffer greatly if they keep withdrawing RM500 monthly from their savings.
He said in the the past, the EPF had openly stated that more than 60 per cent of contributors have less than RM50,000 in savings which won't be enough to sustain them upon retirement.
"By allowing contributors to withdraw up to RM6,000 over a year and lose the yearly dividend for that amount, as well as the very substantial compounding interest accumulated over the years until retirement, the government is practically complicit in ensuring the retirement savings of contributors are even further depleted and unsustainable for post-retirement," he said.
Solomon said what was even more shocking was that Deputy Finance Minister Abdul Rahim Bakri's statement on Saturday that the RM500 in withdrawals is meant to inject an average of RM3.3 billion in the local economy monthly.
"His statement makes it patently clear that the hard-earned savings of workers are being diverted and prioritised as an instrument to prop up the economy, especially retail businesses.
"Using workers retirement savings to revive the economy is a debatable approach to say the least," he said, adding that workers had long been victims of unfair and lowly wages, and clearly needed the extra cash.
Solomon said it made more sense for the government to obtain long term soft loans as an effective way to provide direct and sustained financial assistance to workers through various agencies such as the Welfare Department.
Source : https://www.nst.com.my/…/mtuc-provide-soft-loans-instead-di…