KUCHING: Parti Sarawak Bersatu (PSB) has criticised the federal government for allowing Employees Provident Fund (EPF) contributors from the B40 group to withdraw RM500 a month from Account II of their savings for a period of 12 months starting April this year.
“It is basically telling them to reach into their own pockets and spend what they have,” it said in a press statement issued by the party’s secretary-general George Lo on Tuesday.
PSB said the federal government should instead provide subsidies to reduce the price of basic necessities most needed by the B40 group, even if it means selling the goods at below cost.
The government also needs to help cover their income shortfall until the Covid-19 pandemic is over, in particular daily-paid workers who are now without income, the party added.
“Why is the government not stepping in to help the people and instead asking them to withdraw and spend their own retirement savings now?”
Prime Minister Tan Sri Muhyiddin Yassin on Monday announced that all EPF contributors under 55 years old can withdraw up to RM500 a month from the fund.
This is in addition to the option to reduce contribution rates by four per cent, also starting April this year, which the government hopes will allow workers to have more money in their pockets to buy everyday necessities.
“The EPF is there to provide a safety net for all employees when they retire and are unable to earn an income to sustain themselves.
“It is a long-term savings plan which sees contributions by employees and employers throughout the lifetime of a worker until he retires,” said PSB.
It said reducing contributions and allowing contributors to withdraw their own money will in the long run adversely impact their retirement livelihood, as the savings is effectively hit by a ‘double whammy’ of less input and more output.
“The ones who are most likely to withdraw their EPF savings are the B40 group that the government needs to protect.
“Allowing them withdraw their savings to spend now is therefore not a viable option,” it argued.