COMMENT | Anwar’s silly plan to use EPF savings to get loans

COMMENT | As prime minister, Anwar Ibrahim needs to be much more circumspect and reflective before announcing schemes which needlessly raise peoples’ hope for more spending money to flow into their pockets.

Anwar said that the Employees Provident Fund (EPF) savings will be allowed to be used as security for personal loans. What? Before I explain fully why this may be the most foolish of the EPF schemes to date, if it is somehow implemented, some background will help us better understand the issue.

It looks like politicians from almost all sides want to give money to the people so that they can get their support for elections - the impending ones are the six state elections. In fact, Anwar and Pakatan Harapan, to be on the right side of voters, supported the move to withdraw money from the EPF previously. But, as we shall see, voters are smarter than that.

If they had money in the Treasury’s coffers, the government could raid that to give some free cash to people and buy their votes, a dangerous, and even futile effort. Dangerous because in our current state, it will just increase the debt level too high. Futile because they could still lose the elections anyway.

If they have no Treasury money to give, the “brilliant” solution is to give money from their EPF instead. That won’t endanger the state but it would endanger the livelihoods of millions...