Sunday, October 26, 2008

Guan Eng: Leave EPF money alone. Cut taxes, pay oil bonus instead

The DAP is urging the government to put together a RM48 billion stimulus package instead of using RM5 billion from the Employees Provident Fund (EPF) to address the economic situation.
In a statement released from its headquarters, it further condemned the government for only proposing RM364 million in income tax cuts in its 2009 Budget.

"Why did the government only give RM364.2 million in tax cuts to 10 million workers or a mere RM36 each when it is willing to put workers' funds at risk by using RM5 billion from EPF to bail out selected companies?" secretary-general Lim Guan Eng asked.

According to him, the drop in the Kuala Lumpur Composite Index (KLCI) to 859 points, its lowest close in four years, is a clear indication of the failure of Barisan Nasional's move to inject RM5 billion into Valuecap Sdn Bhd, a company set up by the government to invest in undervalued companies.

"What is RM5 billion to buy shares in a few counters compared to the Bursa Malaysia's capitalisation of around RM700 billion?" the Penang Chief Minister remarked.
"Risking RM5 billion to buy shares in companies belonging to BN cronies only helps the few at the expense of money belonging to all Malaysians."

As an alternative, he suggested a four-prong RM48 billion package:
* An annual oil bonus of RM6,000 to all families earning less than RM6,000 a month, or RM3,000 annual bonus to bachelors earning less than RM3,000 a month, will cost RM35 billion - a mere one-third of Petronas' gross profits of RM107 billion in 2007.

* A progressive reduction of the corporate tax rate from the present 25 to 17 per cent which will cost RM13 billion.

* A daily revision of petrol prices to take into account changes in the international price of oil.

* An immediate reduction in electricity tariffs which was increased by 26 per cent due to escalating oil prices which has since been reversed.

"Cutting costs and putting money into people's pockets will help generate both jobs and businesses. The RM48 billion will be shared by ordinary Malaysians who will put the money into the local economy.

"This will drive the economy and the multiplier effect will help grow and contribute to the GDP and maintain the quality of life of working Malaysians," the Bagan MP said.

He also condemned EPF for agreeing to the measure without calling for a full Board meeting to discuss the issue thoroughly, resulting in representatives from the workers not having a say on how the funds are putat risk "to save those few companies who never remember to give back to workers when they reap huge profits."

"This is another classic case of BN's unique public-private partnership where profits are privatised to individuals but losses are socialised and borne by the public. Such a policy is discriminatory against workers as their funds in EPF should be used to help workers and not employers."

The Malaysian Insider

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