Don’t forget the EPF’s true purpose, National House Buyers Association (HBA) Secretary-General Chang Kim Loong has cautioned the government, even as he lauds the proposal to increase funds in the Employees’ Provident Fund (Account 2) from 30 per cent to 40 per cent to aid those wishing to buy their first home.
Commenting on the proposal by Second Finance Minister Johari Abdul Ghani, which was reported on Wednesday, Chang said the government must study the matter and ensure that they do not allow too large a percentage to be drawn from Account 2.
“The purpose of the EPF is to cater to those in their old age. It is the duty of the government to ensure that there is sufficient money during the contributors’ old age,” Chang told FMT.
“Of course, the proposal should act as a unit trust system of control in the sense that whatever sale of the property goes back into the EPF account to ensure that the same account can be used again for future purchases.”
Johari said as much, adding that house buyers must return proceeds from any subsequent sale back to their EPF accounts.
“There will not be a blanket increase. We are looking at a specific percentage and how EPF can allow some of the money to be used by first-time house buyers for their down payments,” Johari had said in earlier reports.
EPF Chief Executive Officer Shahril Ridza Ridzuan has, however, been non-committal, saying that the fund will not be able to commit for certain to the proposal and that the EPF is currently exploring options with the Finance Ministry.
Chang was appreciative of the proposal, but also added that it had to come in lieu of the earlier proposal by Urban Well-being, Housing and Local Government Minister Noh Omar to allow housing developers to apply for moneylending licences.
He referred to his earlier open letters, published in The Star, against Noh Omar’s proposal, saying that the scheme would drag unwitting house buyers into deeper debt.