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Thread: Harapkan Pagar, Pagar Makan Padi: Say goodbye to your EPF.

   
   
       
  1. #1
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    Harapkan Pagar, Pagar Makan Padi: Say goodbye to your EPF.


    No high-risk lending by EPF, says Finance Ministry


    The Dewan Rakyat was informed in Kuala Lumpur today that the Employees Provident Fund (EPF) only provided loans to asset-rich government linked companies and not to high-risk corporations.


    Deputy Finance Minister Dr Awang Adek Hussin said EPF’s investment panel carried out risk assessments and monitored all its investments, in the form of loans, to ensure they were safe.


    “The Finance Ministry screens and approves the panel's decisions. I’m confident high-risk investments would not be made,” he said in response to a supplementary question from Ismail Kasim (BN-Arau).


    Ismail had wanted to know if EPF was actually monitoring all its investments, especially the high-risk ones.


    Awang Adek said there were several experts on EPF’s investment panel including Bank Negara deputy governor and Treasury deputy secretary-general.


    Answering Azan Ismail’s (PKR-Indera Mahkota) initial question on EPF’s total loans to corporate institutions, Awang Adek said it came up to RM83.7 billion as of June 2011.


    He said RM79.41 billion or 95 percent of these loans were guaranteed as it was to the government, while the balance of RM4.31 billion went to corporate institutions.


    He added that EPF was constantly striving to pay its members higher dividends by ensuring its investments yielded higher returns and did not just depend on government guarantees.


    - Bernama
    py

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    Friday, 02 December 2011 08:36

    Husam: More to it in EPF’s loan to Federal govt



    Written by -




    PAS vice president Husam Musa has queried the Employees Provident Fund's loan of RM79.4 billion to the Federal government, as revealed by deputy finance minister Awang Adek Hussin.

    “Has this figure taken into account the other security and federal government bonds purchased by EPF? As far as I know, if the security and bonds are totalled, EPF’s loan to the government debt will be a whopping RM240 billion!” Husam said in a statement.

    He pointed out that the figure of RM240 million had yet to include EPF’s loan to government-linked companies.

    Based on RM240 million, Husam said 52.6 percent of the Federal government’s debt amounting RM456 billion in 2011 was actually from EPF.

    “If the Federal government’s debt continues to rise, then it should, without statistical manipulation, breach 55 percent allowed by law which will mean the loans are to be taken seriously.

    RM456 billion of debt in 2011 represents 54.3 percent of gross domestic product (GDP), only 0.7 percent more to breach 55 percent,” Husam added.

    With budget deficit of RM45 billion for the 15th consecutive year, the 55 percent would have been breached, he said.

    In order to cover this up, Husam, who is also the Kelantan state exco, claimed that two statistical manipulations could be carried out, either by making the GDP higher at 6 percent or increasing the 2012 GDP by including inflation rate.

    “That is why there is noticeable difference between the total GDP recorded in budget book and the statistics report,” said Husam .

    Although with the statistical manipulation the ratio of debt to GDP has yet to breach 55 percent, he explained, in reality it has already soared beyond the figure.

    “There is no sign that the national economy will grow by 6 percent next year. Any drop in the country’s economy will increase the ratio of debt to GDP.

    "The Federal government’s expenditure is not helping either,” he stressed, referring to high operational and maintenance costs involving defence purchases and residences of the prime minister and his deputy.

    Husam said the Federal government’s debt could be lowered with prudent spending.

    “If not, EPF will only become a cheap piggy bank for the Federal government to squander public funds,” he warned.

    -Harakahdaily

    py

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    Finance: Is the EPF in Trouble?

    Thursday, December 22, 2011

    EPF in Trouble





    EPF IN BIG TROUBLE
    SEE FOR YOURSELVES
    AND LET ALL EPF CONTRIBUTORS KNOW.

    Will you get back your EPF money?

    · One of the largest funds in the world – RM 440.52 billion
    · Represents the life savings of 12 million Malaysians
    · BN govt already spent 60% of the people's savings


    23 June 2011, EPF said that 60% of its funds have been borrowed by the Malaysian govt.

    Dec 2010, the govt still owes EPF about RM 240 billion.

    This means the BN govt has already spent 60% of all your savings.

    DO YOU THINK you will get your money back?

    See the chart (attached). 2012 will mark the 15th year of budget deficit with no sign of financial smarts.

    The Constitution of Malaysia caps govt debt at 55% of GDP. As of 30 June 2011, govt debt stands at 53%. When it touches 55%, the BN govt will officially be in crisis and the Constitution may need to be changed to increase borrowing and possibly require a bailout.

    What happened to Greece recently? They had to write off 50% of outstanding govt loans. Just imagine if EPF is asked to take a 50% cut of outstanding debt owed by BN. More than half your EPF money will be lost, and you just have to accept it, after 40 years of working.

    Most Malaysians know that the government has been using EPF money. However, not many know that the majority of EPF's investments are actually loan to the Malaysian government. It would be okay if the government use money for productive purposes that give good returns. Unfortunately, that's not the case. Read the article & find out for yourself.
    EPF annual report 2010
    MGS 27%
    Loans/Bonds 33%
    Equities 35%
    Money Market 5%
    Is the EPF being looted?

    On the 23rd of June 2011, the EPF (KWSP) tabled its annual report to the parliament, declaring a 5.8% dividend and explained that 27% of its investments were in Malaysian Government Securities (MGS) and 32% were in loans and bonds to Govt agencies. A simple chart below summarises the report. At RM 440.52 billion, the EPF is one of the largest funds in the world and represents the life time savings of 12 million private sector employees.

    The question is why is it that over 60% of EPF funds are in loans to the Govt and Govt bodies?

    Is the Malaysian Government a good borrower?

    Let’s look at the BN Govt’s financial record….

    Below is a summary of the Govt’s annual deficits. The 2012 budget will mark the 15th year of budget deficit with no signal of financial prudence. And as you can see below, there have been supplementary budgets on top of the annual budgets every single year.

    Govt debt as at Dec 2010 stands at 407 Billion ringgit. 60% of this or 240 Billion is owed to the EPF.
    This means the BN Govt of Malaysia has already spent 60% of all your savings in the EPF!

    After running deficit budgets for 14 consecutive years, and funding those deficits by borrowing, Malaysian Govt Securities (MGS) are rated at CC(-)ve. At CC minus, what is the annual yield? Folks, it’s an unbelievable 3% and below!! Why? Because MGS are not auctioned!! There is a ready buyer for MGS and apart from the endless new PNB funds like the 1Malaysia bond, the main buyer of Malaysian debt papers is the EPF.

    "Fair Value" rate for lower grade papers of single A and below is an annual yield of 5% and above. Greek Govt bonds for example are being traded at yields exceeding 21% per annum

    The constitution of Malaysia caps Govt debt at 55% of GDP. As at 30th June 2011, Govt debt stands at 433 billion, which is 53% of GDP. At 55% the Govt will be officially in crisis and the constitution will need to be changed to increase borrowing and possibly even require a bail out.

    Recently the EU central bank agreed to extend financial aid to the Govt of Greece on the condition they adopt massive austerity measures and that the lenders take a haircut of 50% of all outstanding loans. After all, they continually lent to a borrower who showed absolutely NO commitment to cut expenses and begin to service their debts.

    Just imagine if the EPF is asked to take a 50% haircut of their debts from the Malaysian Govt!
    An even worse scenario was painted recently by Pakatan Rakyat when they reported that much of govt debt was unreported as it is largely hidden from public eye in the form of debt owing by Govt agencies.
    Budget 2012 where it goes

    Subsidies 22B
    Corporate Subsidies 10B
    Civil Service pay 64B
    Development 51B
    Operating Expenses 88B

    As you can see above, the 433 billion owed by the Govt is represented by the red and Orange bars. On top of official figures, an additional 184 billion is owed by various Govt agencies.
    Take a look here at another explanation,
    So…. Is the EPF being looted?

    I say yes it is. Let me explain how.

    A summary on the 2012 budget is below,

    Of the total 233 billion, total operating expenses is at 162 billion and over 64 billion is allocated for the civil service in pensions and wages. Of the massive 233 billion, only 51 billion is going to development, of which over 80% is to construction projects, designed to specifically benefit a few lucky fellows. And talking about lucky fellows, over 10 billion in subsidies paid for by us, are being paid directly to corporate bodies!

    And how pray tell will they pay for all this? By borrowing of course! Do they even bother that it is we who will be paying for the debt servicing including interests? Najib even announced that employee’s contribution to the EPF will increase to 12% of salary. Which means even more will be tied up in the EPF
    in order to enable more borrowing! And if you earn less than RM 5,000, your contribution will increase to 13%.

    These are indeed hard times for us, the people. And the Govt has done fabulously well to recognise this by granting pay increments of 7 to 13% to all Govt employees while carefully avoiding the minimum wage issue for private sector employees.

    The Govt currently collects about 4 billion from the GST already in place. A one time payment of RM 500 to civil sector employees will cost the Govt over 2.6 billion.

    Civil service remuneration cost 20 billion in 2004. This year it will cost 64 billion.

    So the bottom line conclusion, again and again is the same. They are looting the EPF to please their vote bank of 1.3 million civil servants.

    Hard times indeed… And yet DRB Hicom is buying 237 armoured personnel carriers from Turkey for RM 1.7 billion and selling it to the ministry of defence for RM 7.55 billion. The Malaysian Govt is buying 6 Littoral Combatant Vessels to enhance our Navy. These are the most advanced naval vessels in the world, able to shoot aircraft, ships and submarines… The ONLY other country that has such ships is the US navy. They have 2. We are buying 6 at a cost of 10 billion ringgit. The MRT can be built for 19 billion. But Idris Jala recently indicated that MMC Gamuda may incur more that the originally estimated cost of 54 billion to build it.

    The Govt can reduce its subsidies for rice and sugar by opening up the market for other players, but no, both commodities are controlled by the same Govt crony. Syed Mokhtar Al Bukhary is the owner of all the companies mentioned above. Since this person took over the exclusive supply of these commodities in 2008, prices have doubled. This is despite the Govt’s subsidy of 60 cents per kilo of rice and 20 cents per kilo of sugar.

    The Govt can easily buy the LDP highway for 1.5 billion ringgit, but no, it’s probably better that they continue to collect toll from us and receive 1.5 billion in subsidy from the govt. Our IPPs buy gas at 10 ringgit cheaper than companies in Thailand and 15 ringgit cheaper than Singapore (Per CuM) but the Govt still needs to feed them billions in subsidy.

    Year after year after year, the Auditor General’s annual report details all the financial mismanagement in Govt depts. But nothing is done. Take this year’s AGs report for example. The MACC went into high gear and opened 36 investigation files to investigate all the rubbish. And the cases are now closed. They found no element of corruption or deceit. Another thing the AG highlighted is the treasury’s contingency fund of 1.5 billion is now only 79 million ringgit. 1.4 billion is missing…..

    The tolled highways were built at a cost of 26.4 billion and the operators have already raked in 37.7 billion and received another 2.1 billion in subsidies from the Govt. And they are planning to raise the rates again soon.

    The Govt machinery of Barisan National is a system that benefits and enriches cronies with massively one sided contracts. It also ensures loyalty from a vote bank of 1.3 million civil servants who enjoy all kinds of benefits at the expense of the tax payer. The tax system is designed to exclude the majority of civil servants from actually paying any tax. And Govt debt is going through the roof. In 2004, the total Govt debt was 217. As at 30th June 2011, it stands at 433 billion. Najib’s administration is milking us dry. And they are using our funds in the EPF to run all these excesses, to enrich themselves, and to bribe the civil service into loyalty.

    We EPF investors are 12 million. Vote against Corruption, vote against poverty, and vote against the looting of your EPF savings.
    py

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    This will be the same story for the EPF money loaned to the urban poor. It will go up in smoke when loans are made to people who cannot afford to buy houses.

    US housing still weak. In other news, the sky is blue


    by Simon Black





    February 1st, 2012



    The latest Case-Shiller numbers released yesterday showed that the US residential housing market is still very weak. After three straight months of declines, home prices are now at 2003 levels. Duh.


    To some, it was a shocking revelation. The pundits I saw discussing it yesterday practically had a seizure they were in such disbelief. CNBC even ran an article on their website in response, extolling the strong fundamentals of US housing.


    Let’s look at those fundamentals:


    1) Most people cannot afford to write a check for $200,000 or more (roughly the median home price), which means they’ll require bank financing. Consequently, speculators and investors aside, home prices must be a function of income– do buyers make enough money to be able to afford the monthly mortgage payment?


    2) Mortgage affordability is tied directly to income levels, and where there’s no job, there’s no income. When you aggregate that notion across an entire economy with high unemployment, it restrains housing affordability.


    3) Millions of people have been taken out of the housing market as potential end-user owners. These are the ‘former’ homeowners who have lost their jobs and/or been foreclosed on. They can no longer qualify for a mortgage, particularly at the ultra-low rates we’re seeing now.


    4) There’s a lot of talk about how low interest rates are making homes affordable. Maybe so, at least to the people who qualify for a mortgage. And while it’s possible that interest rates could go lower, there’s a lot of potential for rates to rise. And when rates rise, homes become more UNaffordable.


    Example: if you can afford $1,500 per month to spend on a home, you would be able to afford a $300,000 home at today’s low rates. If rates go up to 6%, $1,500 per month only buys you a $250,000 home. If that’s what the average guy can afford, that’s where home prices will converge.


    5) Many local governments are completely bankrupt; we’ve read about looming municipal defaults and laying off cops and fire fighters. Property taxes will likely rise as a result, adding an additional cost in buyers’ monthly payments.


    Again, if a buyer can only afford $1,500/month, and his property tax rises by $600/year, that takes about $10,000 off the price of the home s/he would be able to afford.
    6) Ditto for homeowners’ insurance rates, which are rising rapidly.


    7) There are currently 15 million vacant homes in the US according to the latest census figures, and every day, more people are being foreclosed and getting kicked out of their homes. Housing prices can’t have any meaningful rise as long as there’s such excess supply in the market.


    In bad economies, people double up in homes. Roomates. Live-in relatives. The number of households is contracting, and this is a demographic issue– too many homes, not enough families to fill them.


    9) Even if every unemployed American were simply given a home to live in, it would still leave millions of vacant homes on the market.


    10) Given how US Homeland Security treats everyone like a criminal terrorist, foreigners aren’t exactly lining up to tighten the slack.


    Ultimately, while there are bright spots in any market, the fundamentals for US housing remain poor.


    It can be tempting to jump into the market as an investor with prices so low. But gobbling up a low-grade track house simply because it’s cheap is not a sound investment strategy. There are a lot of things in this world that are cheap. That doesn’t mean the price will go up. It just means that they’re cheap.


    A great investment is one that is both cheap, -and- has a catalyst for growth. Median housing in the US has few, if any, catalysts to growth. If you want to invest, stick to the highest quality assets you can find– premium homes in the best locations. They’ll be the first to recover.
    py

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    Pua: Don't abuse hard-earned EPF funds



    While supporting government initiatives to put in place low-cost and affordable housing schemes, the DAP has warned against the use of contributions to the Employees Provident Fund (EPF) for these projects.

    "Such programmes must not be financed by the EPF, as its mission is to protect the hard-earned retirement income of 11 million working Malaysians by maximising returns with the lowest possible investment risks," DAP national publicity secretary Tony Pua said today.Pua pointed out that EPF's key role was to ensure financial security after retirement as it was committed to preserving and growing the savings in a "prudent manner in accordance with best practices in investments and corporate conduct".

    "We call upon the government to source its own funds for the housing programmes and not direct EPF to fund its social welfare schemes," he said.

    On Monday, The Sun reported that EPF would be contributing RM1.5 billion for an "easy financing scheme" for the sale of houses under the National Economic Action Council's People Housing Programme (PPR) and Kuala Lumpur City Hall (DBKL) public housing.

    Prior to that, the newspaper quoted Federal Territories and Urban Well-being Minister Raja Nong Chik Raja Zainal Abidin as saying the funds would be given to the Federal Territories Foundation (FTF) to help some 20,000 eligible tenants and the loans would be repaid over a period of 15 to 25 years.

    "The EPF is not a lender of the last resort for the poor and neither is it a social welfare organisation," retorted Pua, who is also the Petaling Jaya Utara MP.

    Banks should use the houses as collateral


    He said the money would be loaned to house buyers who were unable to "secure financing from commercial banks" and therefore, it would be jeopardising their retirement funds."This is clearly an abuse by the government. Raja Nong Chik tried to allay fears that EPF could be at a losing end if the buyers default on their loans, by giving assurance that the loan is secure as it is guaranteed against the housing unit itself.

    "However, if the housing unit is indeed a credit-worthy collateral, why can't commercial banks take it as a collateral? Why are EPF funds being mobilised to give housing loans?" he asked.

    Instead of using the EPF, Pua suggested that the government makes full use of existing institutions such as Bank Rakyat or Malaysia Building Society Bhd (MBSB) by channelling a special allocation to the banks through the social welfare and housing funds approved in the annual budget to provide soft loans to those in need.

    "By setting a precedent for EPF to be used for social welfare, the EPF could in future be further abused to finance political programmes to win votes under the guise of the same. It is a slippery slope which will jeopardise the future savings of Malaysian EPF members," Pua said.He also urged EPF's Board and Investment Panel to thoroughly re
    view the scheme to ensure that the interests of workers are prioritised and to reject proposals that might harm their financial returns.
    py

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    People Housing Programme: simple math don't look right

    By Lee Wee Tak at 2/01/2012 05:33:00 PM

    As an EPF contributor and tax payer, I am most perplexed and worried by this latest pre- general election allocation of our statutory life savings.



    --------------------------------------------------------------------------------------------------------
    http://www.thesundaily.my/news/281184


    EPF loan guaranteed: FT Foundation


    Last updated on 31 January 2012 - 12:18pm


    Pauline Wong
    newsdesk@thesundaily.com


    KUALA LUMPUR (Jan 31, 2012): The RM1.5 billion loan from the Employees Provident Fund (EPF) to be used for a special funding scheme for public housing is in safe hands, the Federal Territories Foundation said yesterday.


    Foundation executive director Datuk Mohd Idris Mohd Isa said the money will be guaranteed by the foundation for repayment within 25 years.


    The money is to be channelled for an "easy financing scheme" for the sale of houses in National Economic Action Council's People Housing Programme (PPR) and KL City Hall (DBKL) public housing.


    Raja Nong Chik had yesterday told theSun that the funds will be given to the foundation to help some 20,000 eligible tenants and interested buyers living in the urban PPR and KL City Hall public housing units.


    A typical unit in a public housing programme in Kuala Lumpur costs below RM35,000.


    ------------------------------------------------------------------------------------------------
    Take a look at the numbers below. It seems that the abovementioned allocation is meant for more than 20,000 households. If typically a public house only cost RM35,000 then the fund can cater for more than double the 20,000 number of household announced by the minister


    The minister should clarify himself because the numbers do not look right. Unless, of course another minister got misquoted yet again.


    Numbers aside, why do the entire nations’ contributors have to fork out for people in Kuala Lumpur only? Why do retirement fund of a Negeri Sembilan, Sarawak and Kelantan contributor have to do with the housing woe of a person in Kuala Lumpur?


    We have already paid income taxes, service tax stamp duties, assessments and custom duties. When companies pay taxes, they collect from tax payers via their selling price so how come we tax and EPF contributors have to pay again?

    Public Housing programmes should be financed from various taxes collected. It has been like this for so long, why the sudden need to get extra money from EPF?
    Port Klang Free Trade Zone scandal was reported to cost tax payers RM12.5billion and that foul up could pay for more than 8 rounds of this seemingly inflated project.


    If the Barisan Nasional administration exercise commonsense and discipline with our money, the above mentioned expenditure would be nicely taken care of by taxes collected.
    py

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    MTUC: EPF should build, not finance homes


    By Shannon Teoh
    February 04, 2012

    File photo shows a row of low-cost houses. MTUC today slammed Putrajaya’s plans to use RM1.5 billion from the EPF to give home loans to unqualified buyers.

    KUALA LUMPUR, Feb 4 – The Malaysian Trades Union Congress (MTUC) slammed today Putrajaya’s plans to use RM1.5 billion from the Employees Provident Fund (EPF) to give home loans to unqualified buyers, insisting the “giant institution” was capable of developing housing projects on its own.The umbrella body, which represents 802,323 workers from 390 labour unions, pointed to EPF’s RM10 billion development of 1,085 hectares of Malaysian Rubber Board (MRB) land in Sungai Buloh as an example of projects the retirement fund should be pursuing.

    “Instead of just being a financer or partner, EPF should lead and develop projects on its own to gain better returns for its 5.7 million active members,” said MTUC secretary general Abdul Halim Mansor told The Malaysian Insider.

    He added that EPF could develop housing projects to provide homes for workers, estimating that half of EPF’s active contributors still did not own a home.

    The government was forced yesterday to allay fears that the housing loan scheme for those who cannot qualify for commercial financing would result in losses for EPF.

    Federal Territories and Urban Well-being Minister Raja Datuk Nong Chik Raja Zainal Abidin said the loan was secure as it is guaranteed by the Kuala Lumpur City Hall (DBKL), a government agency.

    Under the scheme, applicants will receive a 100 per cent loan, with a repayment period of up to 25 years to allow loan borrowers to make “smaller” monthly repayments.

    But the opposition has raised doubts over the minister’s assurances, stating that with such a guarantee, banks would be rushing to provide the loans instead of shying away.

    Under the deal, the EPF earns 5.5 per cent interest per annum in repayments made by every home owner.

    But Abdul Halim pointed out today that 5.5 per cent was below the normal rate of return for EPF, which dished out 5.65 and 5.8 per cent dividends in the last two years.

    “You can even deposit in a bank and get maybe less 1 per cent but it is far less risky than giving it out as loans to underqualified homeowners.

    “EPF should be seeking out better returns with more aggressive investments rather than just playing a secondary role,” he said.
    py

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    Pua tells EPF employee reps to reject loan scheme


    By Yow Hong Chieh
    February 05, 2012


    KUALA LUMPUR, Feb 5 — DAP MP Tony Pua today urged employee representatives on the Employees’ Provident Fund (EPF) board to reject the proposed RM1.5 billion low-cost housing loan, saying it would open up the fund for further “political abuse” in future.

    The DAP publicity secretary said Putrajaya’s bid to use the retirement fund’s monies to extend easy home loans to those with “extremely poor credit rating” would set a bad precedent and turn EPF into a lender of last resort for social welfare programmes, in breach of the EPF Act.

    “While the prime minister, Datuk Seri Najib Razak, has tried to play down the scheme by claiming that the RM1.5 billion loan is only a fraction of EPF fund size, if approved, the scheme could well be expanded and extended to other states in the country,” he said in a statement.

    The EPF board employee representatives comprise Malaysian Trade Unions Congress (MTUC) president Mohd Khalid Atan, National Union of Teaching Profession (NUTP) secretary-general Loke Yim Pheng, Sarawak Bank Employees Union (SBEU) president Hadiah Leen and Sabah Commercial Employees Union (SCEU) general secretary Azlin Awang Chee.

    Pua (picture) also called on the three professional representatives who sit on the board — Tan Sri Lee Lam Thye, Heng Hock Cheng and Halim Din — to call for a review of the easy home loan scheme to uphold public interest.

    The EPF board of directors must also exercise their powers in the interest of contributors above any other interested parties, including the government, the Petaling Jaya Utara MP added.

    “The directors must insist that any loans in this case, must be extended directly to the federal government and not to the individual low-cost house purchasers,” he said.

    “It is for the federal government to bear the responsibility of social welfare by providing a roof over the head of all Malaysians, and not the responsibility of the EPF.”
    py

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    Pakatan: EPF loan scheme masked to hide federal debt

    By Clara Chooi February 06, 2012KUALA LUMPUR, Feb 6 — Pakatan Rakyat (PR) lawmakers accused Putrajaya today of abusing monies from the Employees Provident Fund (EPF) to hide its current debt levels under the guise of offering a purportedly “noble” housing scheme for lower-income earners.

    Slamming the move, DAP publicity secretary Tony Pua and PKR vice-president Nurul Izzah Anwarwarned in a joint statement here that the scheme could throw Malaysia into a “debt-induced financial crisis” should borrowers default on their loans.
    Pua (left) and Nurul Izzah said workers should not bear the burden of the BN government’s follies. — File pic

    The Ministry of Finance (MoF) and the Federal Territories Ministry must hence come clean on why it has chosen to risk workers’ retirement savings and the real reason why the government can’t fund the housing for the poor directly.“

    MoF must solve its own financial problems and not for the Malaysian workers to bear the burden of the BN (Barisan Nasional) government’s follies,” they said.

    Pua and Nurul Izzah, who are the MPs for Petaling Jaya Utara and Lembah Pantai respectively, explained that under normal circumstances, any welfare programme to assist the poor would be funded by the federal government through its tax revenue.

    Should the monies prove insufficient, they added, the government may issue bonds to raise money to finance its deficit expenditure.

    As such, the duo pointed out that Putrajaya could have issued such bonds to the EPF and still achieve its objective of helping lower-income earners secure home loans.“

    It is hence extremely odd that the Federal Territories and Urban Well-Being Minister Datuk Raja Nong Chik Nong Raja Zainal Abidin announced that the EPF would be extending RM1.5 billion in loans directly to those who failed to secure commercial loans to purchase their houses.“

    The fact that the government could have easily circumvented the entire controversy... arouses suspicion that something is amiss,” Pua and Nurul Izzah said.

    The only explanation, they said, was that the MoF was attempting to hide its debt exposure by asking EPF to directly lend the RM1.5 billion to borrowers and issuing government guarantees for the loans.“

    This way, the RM1.5 billion will not be reflected as an increase in federal government debt,” they said.

    The country’s federal debt level reached RM456 billion at the end of 2011, they pointed out, which is a marked 88.4 per cent increase from the RM242 billion in 2006.

    Multibillion ringgit infrastructure projects approved by the government like the Klang Valley MRT and the West Coast Expressway would only see the level increase significantly in the following years, they added.

    “Unfortunately, to be constantly perceived by the rakyat as the champion for the poor, the government is now coming up with a new and ill-thought scheme — utilising EPF monies to hide its current debt levels,” Pua and Nurul Izzah said
    py

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    Union reps say clueless over EPF loan scheme


    By Shazwan Mustafa Kamal
    February 07, 2012
    KUALA LUMPUR, Feb 7 — The government did not consult the Employees Provident Fund’s (EPF) board of employee representatives when it decided to use RM1.5 billion from the EPF to give home loans to unqualified buyers, union officials have said.


    Former Sabah Commercial Employees Union (SCEU) general secretary Rebecca Chin, who sat on the EPF board from 2007 to January 31 this year, charged that she was not informed of the new loan scheme during any of the EPF board meetings.


    “By convention, we should have been informed. I was a representative of SCEU until January 31, but I was not even aware of this. We were not aware of it until the announcement was made and we had to read it in the newspapers,” she told The Malaysian Insider.


    Asked whether it was unusual that she was not informed about the new scheme, Chin responded by saying “we know the government system, and how it works... I’ve yet to be briefed or notified about this.”


    Her remarks come after Federal Territories and Urban Well-being Minister Raja Datuk Raja Nong Chik Raja Zainal Abidin said last week the government had approached a few potential funders before announcing the project, and that it was the EPF’s management that “came forward” to offer to fund the home loan scheme.


    But he did not explain why the government did not use its own funds for the loan scheme, saying that the RM1.5 billion would be drawn out from the EPF “in stages”.
    “What do we know about this scheme? So many questions come to mind... if I am not part of EPF, am I allowed to take out money from EPF?


    “Also, if you are talking about a fund that is supposed to be on a national scale, why is the loan only for people in Kuala Lumpur? What about Sabahans? What is the minimum wage here? We have no money too,” Chin said.


    “As a representative for Sabah, is this fair for Sabah people?” she said, adding that she wanted to know which stakeholders were consulted before the government announced this loan scheme.


    Those on the EPF’s board of employee representatives include the Malaysian Trades Union Congress (MTUC) president Mohd Khalid Atan, National Union of Teaching Profession (NUTP) secretary-general Lok Yim Pheng, Sarawak Bank Employees Union (SBEU) president Hadiah Leen and newly-appointed SCEU general secretary Azlin Awang Chee.
    Mohd Khalid (picture) told The Malaysian Insider that the MTUC was not made aware of the loan scheme, and that he “could not recall” the matter being discussed in any of the board meetings with the union representatives.


    “It is difficult to comment on this. I was unwell for the better part of last year, and only attended the meetings in June or July. But since then I cannot remember or recall being informed of this plan during any of the meetings.


    “It was not deliberated to us... I found out about this when it came out in the newspapers, along with the announcement made by the prime minister,” said the MTUC president.


    He said the MTUC, which represents 802,323 workers from 390 labour unions, was not invited for a special briefing on the new home loan scheme organised by Raja Nong Chik at the KL City Hall (DBKL) last Friday, and that MTUC was concerned with the sketchy details surrounding the terms of the scheme.


    “If this is a loan to the government, there will be some security. But it is not, we do not know the details... EPF has to clarify. We need security.


    “Generally, I don’t think anyone will be happy without a guarantee of security,” Mohd Khalid added.


    He said MTUC has scheduled a meeting with the EPF board on February 16.


    “We have arranged a meeting to discuss the matter. We want clarification so that we, being employee representatives of EPF, know what is going on.”


    MTUC had over the weekend slammed the proposed loan scheme, saying that the government was capable of developing housing projects on its own.


    The NUTP’s Lok however was tight-lipped when asked to comment on the matter, and told The Malaysian Insider she would only speak once she met up with the rest of the EPF board.


    Attempts by The Malaysian Insider to contact other EPF board representatives have been unsuccessful so far.


    Pakatan Rakyat (PR) lawmakers have accused Putrajaya of abusing monies from the EPFto hide its current debt levels under the guise of offering a purportedly “noble” housing scheme for lower-income earners.


    But PM Datuk Seri Najib Razak said on Friday the use of RM1.5 billion of EPF funds in the home loan scheme will not be detrimental to EPF contributors.


    This, he said, was because the amount needed to finance the loan scheme was not big compared to EPF’s funds.


    Najib said that Raja Nong Chik would be asked to further explain the scheme to the public, adding that it was designed to help the lower-income group who failed to obtain loans from financial institutions to own houses.


    Raja Nong Chik himself gave a guarantee earlier that the government would safeguard EPF’s interests, saying the deal ensured secure financial returns for the EPF.


    He had recently said EPF funds will be used to help some 20,000 people who are still renting in the city to buy homes under the Federal Territories Foundation.
    py

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