Govt proposes increasing funds in account two to 40% from 30%
PETALING JAYA: The Government is discussing with the Employees Provident Fund (EPF) to provide flexibility to first-time home buyers in withdrawing more from their account to aid their affordable home financial needs.
Currently, EPF members can only withdraw from their account two to finance their home purchases. Recent news reports suggested that the Government revised the percentage of funds in EPF accounts one and two.
The report said by increasing the funds in account two from the current 30% to 40% of EPF balances, contributors can have more funds in account two to pay the downpayment of their property.
“In this current environment, I would say it is a good suggestion to bridge the financing gap between loan and down payment for first time home buyers.
“We are still in talks with EPF on this matter. One thing for sure is that it will be limited to first timers of affordable home purchase.
“And if the house is sold at a later stage, the proceeds must be returned to EPF based on the extra quantum they had withdrawn, so that the system will not be abused,” Second Finance Minister Datuk Johari Abdul Ghani told the press.
He said this after delivering his keynote address at the National Chamber of Commerce and Industry of Malaysia roundtable session that was themed “Malaysian Economy Today – The Challenges, Vulnerability and Resilience: and the Remedial Measures” yesterday.
On the upcoming Budget 2017, Johari said the Government will continue to cut down on duplicate expenses among the ministries to reduce operating expenses.
“We don’t have the numbers yet as of how much we will be saving but we are looking at duplication of spending among ministries such as in the areas of entrepreneur development and research and development that could be consolidated,” he said.
He said although operating expenses made up the biggest portion of the country’s spending, certain fixed expenses like civil servants’ emoluments and pension cannot be cut.
“We have about 1.6 million government staff and the expenses will grow every year. What we could do is to reduce the numbers of future employment and increasing productivity.
In the upcoming Budget, Johari pointed out that the Government will focus more on people centric-programmes such as the building of school and hospital.
“We will make sure we gave proper allocation for the rakyat in the upcoming budget,”
He reiterated that the Government will go ahead with mega infrastructure projects that can bring multiplier effect to the country economy as well as people well-being.
In his speech, Johari said Malaysia needed to have a sizeable and sustainable reserve fund to provide stability and insulate the economy from volatile cycle of commodity prices.
“The recent commodity price crisis has profoundly imparted an important lesson for the Government.
“Significant decline in oil prices have resulted in the Government losing about RM30bil in revenue last year.
“Countries like UAE and Saudi with sizeable reserve funds of US$1.2 trillion and US$758bil respectively, are some examples of nations which have been successful in cushioning the impact of significant decline in oil price on public spending which is crucial to spur growth amid a more modest global economic conditions,” he said.
Johari said besides sizeable reserves, good stewardship was needed, that is finding the right balance between short and long term goals.
“The Government has undertaken several strategic initiatives to ensure that the Malaysian economy will continue to prosper. Consider the push for productivity and innovation driven growth outlined in the 11th Malaysia Plan.
“It reinforces the need towards greater mechanisation and automation driven by technology and more skilled labour force,” he said.