BN's support for budget 2021 hinges on retirement fund withdrawal, loan moratorium extension: Najib
KUALA LUMPUR: Former Malaysian prime minister Najib Razak said on Tuesday (Nov 10) that Barisan Nasional's (BN) support for budget 2021 is conditional upon people being allowed to draw from the Employees' Provident Fund (EPF) and an automatic extension of the loan moratorium during COVID-19.
“I would like for the PN (Perikatan Nasional) government to note that these two conditions have to be met. Our support for this budget is subject to these two conditions being met,” he stated during budget debate in parliament.
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The BN's backbenchers club chairman said in his speech that the allowance for a higher withdrawal limit of the EPF account 1 was important, because the RM500 (US$121) withdrawal limit for 12 consecutive months as proposed by the Ministry of Finance in budget 2021 was insufficient.
“The one-off withdrawal limit of up to RM10,000 is important and I would like to explain why. With this amount, Malaysians who have been affected by the pandemic could repay all their pending payments such as utilities, insurance, housing installments and such.
“The money could also be used as a basic model for people who have lost their jobs to start a business. An example would be for someone to be able to buy a motorbike to join a delivery service to make an income. This cannot be done with only RM500 a month,” he said.
BN has proposed to increase the EPF withdrawal limit to RM10,000.
The former prime minister added that a higher withdrawal limit would neither affect fiscal deficit nor contribute to the national debt.
Najib said the government should not deny the people access to their own money when they need it the most.
“Instead what the government should focus on is on how the (withdrawn) money could be returned to the account in the soonest so that EPF members will have the money there when they retire."
There are three methods which can be done post COVID-19 for this to happen, he said. First, the government can help EPF to get more lucrative projects.
The government can also increase the percentage of monthly contributions after the crisis is over. It could also change the structure of the dividend payment to a multi-tier dividend structure. This would allow those who have low savings in their account to get a higher dividend, he said.
The Pekan MP also explained that even if all four million EPF members withdrew the maximum RM10,000 amount, the total sum involved would be RM40 billion.
“Even then, not everyone would withdraw the maximum. So we can project a total withdrawal of maybe RM20 billion or RM30 billion which I believe EPF can prepare and Bank Negara can buy government bonds owned by EPF to help the cause.
“Do not let people say we asked for EPF and we got CMCO instead,” he said referring to the Conditional Movement Control Order which has now been reinstated in the peninsula until Dec 6.
AUTOMATIC EXTENSION OF LOAN MORATORIUMS
Turning to the loan moratorium issue, Najib who served as a finance minister during his time as prime minister said the extension of the moratorium was important in addressing the plight of the middle income earners.
“We need to admit that the middle income earners are the ones least addressed in Budget 2021.
“We need to focus on them. Do not wait until the M40 (middle 40 per cent) become low-income earners. Therefore I urge for the moratorium to be extended until Jun 30, 2021,” he said.
He added: “We need to give more money to the people, directly into their hands and the moratorium extension, just like the EPF withdrawal is one of the many ways which would help the people immediately.
“This can be done without affecting the fiscal deficit or increasing the national debt, so I urge for the finance minister to consider making these amendments to Budget 2021.”
Under the budget proposal, those in B40 (bottom 40 per cent of households) who are recipients of aid programmes and micro entrepreneurs will have the option to defer loan payment for three months, or reduce the monthly instalment by up to 50 per cent for six months.
M40 borrowers who declare a drop in income will also qualify for loan repayment assistance.
MORE FINANCIAL SUPPORT FOR SABAH
Following the Sabah state election on September 26, Malaysia experienced a third wave of COVID-19 infections nationwide.
Sabah which prior to the election recorded minimal number of cases as compared to other states nationwide, now has the highest numbers amounting to 19,898 cases from the 41,181 cases recorded nationwide as of Nov 9.
In this regard, Najib urged the government to set aside higher budgetary allocations for Sabah which has been struggling under the weight of the pandemic.
“It was recently reported that Petroliam Nasional Berhad (Petronas) would pay RM1.23 billion to the Sabah state government next year. This amount has not been added to the budget, but if it is true, I urge for that money to be channelled in the form of Bantuan Prihatin Nasional payouts where Sabahans receive another RM1,000,” he said, referring to payments under the national stimulus package unveiled by the government this year.
He was echoed by Democratic Action Party's (DAP) secretary-general Lim Guan Eng, who also said the budget did not sufficiently address the plight of Sabah.
“Sabah as a state and Sabahans really need the allocations at this point in time and that it was unfair to not have allocations for them as part of Budget 2021.
“They are the most affected in this third wave and more needs to be done to ensure that their situation is helped,” he said.
ALLOCATIONS FOR HEALTH, EDUCATION UNDER THE SPOTLIGHT
The Bagan MP added that areas which were critical but were not adequately addressed in Budget 2021 included health and education.
“The (COVID-19 Fund) allocation has been reduced to only RM17 billion for next year from the RM 38 billion this year and we do not know why it needs to be reduced. Because actually the allocations for COVID-19 needs to be big to face the problems arising from COVID-19.
“We see that the allocation for health (in the overall budget) has been increased by only 4.3 per cent which is a lot less than the 6.6 per cent increase during the Pakatan Harapan (PH) rule when there was no COVID-19,” he said.
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Speaking on the education sector, Mr Lim pointed out that in this year's budget, PH had increased the allocation for education from RM60.2 billion to RM64.1 billion which is a 6.55 per cent increase. But under PN, the education budget only saw a one per cent increase from RM64.1 billion to 64.8 billion.
“This does not show enough emphasis on the education sector. This is in fact the opportunity to digitalise the education sector, whether we ensure better internet connectivity or ensuring all students including in higher education institutes to have access to laptops.
“Education is one of the most important sector and with only four months of actual education this year, I can estimate that the losses run into the billions, so more needs to be done,” he said.
There have been fears that Members of Parliament would block the passage of the budget and turn it into a no-confidence vote against Prime Minister Muhyiddin Yassin. The king had earlier urged lawmakers from both sides of the political divide to support the Bill.