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07 February 2012

EPF loan scheme masked to hide federal debt



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 Anwar warned in a joint statement here that the scheme could throw Malaysia into a “debt-induced financial crisis” should borrowers default on their loans.
“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.


It is shameful for the government to use the workers hard earned money to help poor house buyers. That shows the government has no money to spare or keeping what ever they have to BUY VOTES.

UMNO and BN money are being safe for the GE whilst they go all out to sell whatever the country has to their croonies at a fraction of the price. All new government acquisition is expected to be at a price higher than what had been quoted by the AG in their earlier reports. BN knows their days are numbered

During TDM time, petronas was the cash cow. Now that petronas is empty, Najib turns to EPF. God knows when EPF will be empty as well. God bless Malaysian. This coming election, send the BN team to NIVANA.

Can somebody enlighten me whether there is any clause in EPF rules that says that government can direct EPF to do whatever they wish? The only thing that I know is that, EPF is allowed to make whatever investment that they think will make profit, not giving out loan.

And Najib said that rakyat should not be worried as the loan is guaranteed by govt. Worry or not ... the main question is, why have to use our money. Why dont u use govt money ... govt dont have to worry maa, as it is guaranteed.
The only thing that I can read between the lines ... govt piggy bank got no more money.

The BN gove first use the govt money to 'buy' vote in the coming election by offering RM100 to all students of government school (private schools excluded). Then the RM500 for the kower income group with household below 3000pm. Being desparate an bleeding the govt coffers dry, they now turn to using EPF funds.. BN govt is scrapping for money just to 'buy' votes...

They think by throwing money, they will keep the public quiet from the corruptions and the cronies are into.. NFC scandals, PM's wife's shopping spree and all those stuff.

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