Giving workers such a choice would be dangerous, said Mohamed Ghouse Nasuruddin, a professor at Universiti Sains Malaysia. It would be counterproductive, said Yeah Kim Leng of Sunway University.
The proposal was made recently by Liew See Yee, the president of the Perak Chinese Chamber of Commerce and Industry (PCCCI). A news report quoted him as saying that workers should be given the option of withholding their contributions to EPF. He said this might help them cope with the high cost of living and inject more money into the market.
Ghouse described the proposal as “very dangerous”.
“If you allow people access to their EPF savings, they may jeopardise their future just so they can satisfy their current needs,” he said.
Ghouse pointed out the difference between allowing a contributor to withdraw part of his savings to buy a house and allowing him to stop saving a portion of his salary.
“There’s investment in housing,” he said, “ but if you allow people to take what they ought to save and use it for the purpose of normal daily consumption, you’re exploiting them.”
He said the government should instead be considering what it could do to ensure that people could live a comfortable life.
“We should be looking at controlling prices, giving proper subsidies in terms of food stamps and ensuring a community kind of development with NGO involvement. The government should also cut down its spending.”
Yeah said Liew, in making his proposal, had apparently failed to consider long-term consequences.
“Exploring other options of supplementing income or living on a tighter budget would be wiser in the long term given that retirement savings are meant for your retirement,” he said.
However, he said he would agree to giving workers “in dire need” the option of not contributing, but only for a year.
An obvious implication of the proposal is that employers too would stop contributing to their workers’ savings. Referring to this, Yeah said if the government were to agree to the proposal, it should restrict the option to industries that were currently facing stiff competition as well as trying to cope with declining demand.