Economist Muhammed Abdul Khalid has criticised the previous administrations for allowing withdrawals from the Employees Provident Fund (EPF) because of the Covid-19 pandemic.
He also suggested that ministers and MPs be placed on EPF instead of receiving a pension.
Muhammed pinned the blame on Tengku Zafrul Abdul Aziz who served as finance minister under former premier Muhyiddin Yassin and his successor Ismail Sabri Yaakob for the previous withdrawals.
“The EPF withdrawal is the biggest mistake this country has made since independence.
“The former finance minister should be punished for this silly decision which made a lot of people poor,” the former Khazanah Research Institute director told the Kuala Lumpur and Selangor Chinese Assembly Hall (KLSCAH) 100th anniversary conference.
In March last year, Zafrul denied he resigned as finance minister when he failed to turn up in Parliament for the Ministers’ Question Time after the Ismail government announced it would allow a fourth round of EPF withdrawals.
The speculation was raised based on his statement in an earlier media interview in which Zafrul said he would rather resign than compromise on decisions he felt were wrong such as allowing further EPF withdrawals.
Zafrul is currently the investment, trade and industry minister.
Although Perikatan Nasional pressured Anwar Ibrahim, who became prime minister in November last year, to permit another round of withdrawal, the latter refused.
No pension for MPs, ministers
On scrapping the pension for MPs and ministers, Muhammed said they should be on the same boat as the people.
“One resolution you should put in your memorandum is no more pension for MPs or ministers.
“(Right now), they serve four to five years and they get a pension for life,” he added.
Elaborating on the EPF withdrawals, he said the gap between the rich and poor in Malaysia had widened because of the move since most who opted for it were from the B40 income group, causing their savings to drop by 70 percent.
Due to this, he said one in two Malaysians who are about to retire only has around RM10,000 in their retirement fund, which means they will have to subsist on RM200 a month.
Muhammed urged for a better and more holistic social protection net in Malaysia, where he said only 60 percent of Malaysian workers are contributors to the EPF compared to Singapore where 99 percent of their employed population is covered.
“If you are in the informal sector (in Malaysia), it is not compulsory (to contribute to EPF). The government encourages it.
“This is wrong. Every worker, regardless of formal or informal, Makcik Kiah or you or business owners, must contribute. It’s a very important social protection,” he added.
Poverty rate
Muhammed said it is pointless for politicians to argue about which administration increased the GDP the most because the rate of poverty in Malaysia went up in tandem with the GDP.
“Poor people keep increasing in Malaysia. But if you want to be a high-income country… We should measure poverty based on high income (standards).
“High-income countries look at half of the median income (as the poverty line). Now in Malaysia, if you earn below RM2,600, you are considered poor. Half the median income is RM3,200. A RM600 difference.
“If you use that cutoff, the percentage of poor people in Malaysia will increase from 6.2 percent to 16 percent - from two million (people) to five million, increasing (the cutoff) just by RM600.
“That shows how vulnerable many Malaysians are. In other words, if your car gets into an accident or you need to change a tyre, you’re finished,” he added.
Revamp tax system
One way to remedy this would be to revamp the “regressive” tax system in Malaysia, he said, pointing out that those who are rich tend to pay less or even no taxes.
As an example, Muhammed cited the zero-tax incentive given to those who buy electric vehicles, which tends to appeal to the higher-earning income group.
“If you are Makcik Kiah and you buy a Myvi, you have to pay a tax,” he said.
With talk of the goods and services tax (GST) returning, the economist said that would be okay if other “fair” taxes were also imposed.
“You cannot penalise Makcik Kiah,” he added.
Muhyiddin popularised "Makcik Kiah" when he used this fictional character as an example when announcing the Prihatin Rakyat Economic Stimulus Package in 2020. - Mkini
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