Use unclaimed money to revive economy, help the needy

With Covid-19 forcing governments to do whatever it takes, especially when it comes to job retention, wage subsidies and financial incentives, finding new sources of revenue has also become more challenging.

There is one source, however, that could readily be mobilised and that is the unclaimed money under the care of the Accountant-General’s Department, Registrar of Unclaimed Money.

Through the department’s Electronic Government Unclaimed Money Information System (eGUMIS) which was activated in 2018, the public can check for any unclaimed money.

Unclaimed money includes:
1. Salaries, bonuses, commissions and other payments made to employees
2. Dividends and profits declared for distributions
3. Insurance claims
4. Matured fixed deposits
5. Credit balance from dormant savings

In 2019 alone, an estimated RM9 billion of unclaimed money was found. As comparison, the amount approximates the direct injection of the Short-Term Economic Recovery Plan (Penjana) at RM10 billion. It also represents a fifth of the overall cumulative injection of RM45 billion.

In order to unlock this potential source of revenue, the Unclaimed Money Act (1965) – which holds that unclaimed money is placed under the care of the government – needs to be amended or substituted with a new bill which will legally enable the Registrar of Unclaimed Money to transfer the outstanding amount to government coffers. Another obstacle to overcome is the lack of expiry date for the money.

Now, it will certainly be objected that this act of expropriation could well be unconstitutional as a breach of one’s human rights and a form of “theft”. As it is, the money to be transferred remains unclaimed and idle.

As such, the government is legally entitled on the basis of common law principles to use or dispose of the unclaimed money in any way it sees fit so long as it’s not contrary to the Constitution, public policy or morality.

The amendment embodied in a new bill would be debated in Parliament and subject to parliamentary approval.

Preferably, the bill should refer to the forthcoming Covid-19 (Temporary Measures) Bill as the umbrella legislation to provide additional legal backup, which also means that Act 1965 will be reset once the outstanding amount is exhausted. And the situation therefore will revert to normalcy under the provisions of the existing Act.

Desperate or extraordinary times call for desperate or extraordinary measures.

Even the previous Pakatan Harapan administration resorted to the unconventional method of tapping into donations as a source of revenue as a means to pay off the 1MDB debt.

This was set against the backdrop of a fast ballooning national debt of RM885.9 billion in 2018, including contingent liabilities, public-private partnership lease payments and the 1MDB debt.

Therefore, proposing for unclaimed money to be diverted by the government for social purposes as a “stop-gap” or emergency measure on a temporary basis is not that far-fetched a policy idea.

So long as everything is done in a transparent, accountable and democratic manner, and the unclaimed money is used to stimulate the economy, it’s a reasonable option that will be agreeable to many.

In this regard, the unclaimed money should be used to extend the applicability of the Wage Subsidy Programme (WSP) in relation to targeting the SMEs.

Or the unclaimed money could be used to target households especially the B40 by providing them with vouchers for essential items such as face masks and sanitisers and that can be used at selected outlets.

Be that as it may, putting unclaimed money to good use on an ever so temporary basis makes a difference to government coffers because every penny counts.

 

Jason Loh Seong Wei is head of social, law and human rights at EMIR Research, an independent think tank focused on strategic policy recommendations.

The views expressed are those of the author and do not necessarily reflect those of FMT.