KUALA LUMPUR (Feb 1): Worker’s contributions to the Employees Provident Fund (EPF) should not be used to finance the special funding scheme in public housing programmes in Kuala Lumpur, said the DAP.

DAP national publicity secretary and MP for Petaling Jaya Utara Tony Pua said the EPF was not a lender of the last resort for the poor and neither was it a social welfare organisation.

“By utilising RM1.5 billion of Malaysian workers’ monies to lend to house-buyers who are unable to secure financing from commercial banks will only jeopardise their retirement funds and is clearly an abuse by the government,” he said in a statement on Wednesday.

Pua said this in response to a news report in a local daily on Jan 30 in which Federal Territories and Urban Well-being Minister Datuk Raja Nong Chik Raja Zainal Abidin said the funds will be given to the Federal Territories Foundation to help some 20,000 eligible tenants.

To recap, Raja Nong Chik was quoted as saying that "the scheme, announced by Prime Minister Datuk Seri Najib Abdul Razak, will help those who are eligible to buy public housing units but are unable to obtain loans from banks, due to them being retired or not having steady income."

The minister was also quoted as saying that the loans would be repaid over a period of 15 to 25 years with an interest rate charged, but at a much lower than current housing loan interest rates charged by banks.

Pua said the DAP supported the measures by the government to put in place low-cost and affordable housing schemes to help put a roof over the head of poor Malaysians.

“However such programmes must not be financed by the EPF whose mission is to protect the hard-earned retirement income of 11 million working Malaysians, by maximising returns with the lowest possible investment risk,’ he said.

Pua said that instead of using the EPF, the government should make full use of existing institutions such as Bank Rakyat or even Malaysia Building Society Bhd (MBSB) by channelling special allocations to them via the social welfare and housing funds approved in the annual Federal Government budget for the purpose of providing soft loans to those in need.

By setting a precedent for EPF to be used “social welfare”, the EPF could in future be further abused to finance political programmes to win votes under the guise of the same, he said.

It is a slippery slope which would jeopardise the future savings of Malaysian EPF members, he said.

“We call upon the government to source its own funds for the housing programme and not direct EPF to fund its social welfare schemes.

“We also call upon the Board and Investment Panel of the EPF to thoroughly review the scheme to ensure that it is the workers’ interest which is being prioritised and reject proposals which may harm the financial returns for our workers,” said Pua.