By William Isau
SIBU, Nov 10: Requiring foreign workers to contribute to Employees Provident Fund (EPF) would not only reduce the dividend rate but also offer little economic benefit to Malaysia’s economy, opines Sarawak United Peoples’ Party (SUPP) Dudong chief Wong Ching Yong.
Speaking at a press conference today, Wong cited Singapore’s recent decision to close its Central Provident Fund (CPF) accounts to foreign employees effective April 2024, as evidence of the potential drawbacks.
“The decision of the Singapore government proves there are significant economic risks associated with requiring foreign workers to contribute the same amount to EPF as local citizens,” he said.
Wong, who also serves as SUPP’s central deputy organizing secretary, highlighted the concerns raised by the 2025 budget announcement.
He argued that EPF was designed to secure the retirement funds of Malaysian citizens, and expanding it to foreign workers could strain resources that have been built up over years of investment.
He expressed worry particularly over the financial impact on Malaysia’s foreign exchange reserves, given that there are approximately 2.5 million documented foreign workers in Malaysia’s workforce of 17.2 million. If these workers become EPF members, they will continue to draw dividends even after returning to their home countries, potentially leading to a large outflow of foreign currency.
“If 2.5 million foreign workers, making up 15 per cent of the workforce, are added to EPF, can Malaysia afford to pay out additional dividends amounting to hundreds of millions of ringgit annually?” Wong questioned.
Wong also pointed to Malaysia’s current fiscal challenges, noting that as of June 2024, national debt has reached RM1.2275 trillion, or 63.1 per cet of Gross Domestic Product (GDP), while the fiscal deficit for 2024 is projected to be 4.3 per cent, equating to RM85.4 billion.
He warned that requiring EPF contributions for foreign workers could significantly increase the operating costs for businesses, as well as the expenses of families who employ foreign domestic helpers.
Wong argued that this would likely force companies to cut local jobs or raise prices, potentially fueling inflation.
Wong urged the Madani government, to consider the current economic challenges faced by Malaysians, including inflation, the depreciation of the ringgit, and international economic pressures.
As an alternative, he proposed establishing a foreign worker insurance plan to address their basic welfare needs, covering medical and work-related injuries without requiring the 11–13 per cent salary contribution to EPF.
“An insurance plan would meet the basic needs of foreign workers and safeguard the financial benefits for Malaysians in the EPF system,” Wong asserted. — DayakDaily
