SIBU: Chairman of the Sarawak United People’s Party (SUPP) Dudong branch, Cr Wong Ching Yong believes that forcing local entrepreneurs to pay Employees Provident Fund (EPF) to the foreign workers will only dilute the rate of dividend enjoyed by the existing contributors of the EPF but bring no financial benefits to the national economy.
According to him, Singapore has closed its Central Provident Fund accounts of all foreign employees effective April 2024 and that the decision of the Singapore Government is enough to prove there are serious economic drawbacks of asking foreign workers to pay the same amount of EPF as its citizens.
Wong, who is also the central deputy organising secretary of SUPP, highlighted that the 2025 budget announcement had caused widespread discussion and concern amongst the entrepreneurs.
“EPF is a saving system designed to protect the retirement of Malaysian citizens and the resources and policies of the EPF have always been to meet the needs of its citizens.
“If foreign workers are included in this system, it will not only dilute the hard earned resources accumulated over the years by the investments of EPF but also bring a series of negative social and economic impacts, particularly the economic burden of the local business community and the foreign reserve funds of Malaysia,” he said at the branch’s mobile service at a cafe in Jalan Salim here yesterday.
Wong, who’s also Sibu Rural District Council (SRDC) deputy chairman, said that foreign workers would return to their respective countries after ceasing their employment in Malaysia.
If the foreign workers were registered as members of EPF, they would continue to enjoy the annual dividends declared by the EPF even after they had left Malaysia.
This, he pointed out, would lead to a huge outflow of foreign exchange fund and cause a negative impact on Malaysia’s foreign exchange reserve because there were a minimum of 2.5 million (as at August 2024) documented foreign workers out of a workforce of 17.2 million in Malaysia.
Wong asked, “If 2.5 miliion foreign workers who make up 15 per cent of the workforce become EPF members, can our country afford to fork out the additional dividend amounting to a few hundred millions ringgit annually to be paid to these foreign workers? What are the financial and economic benefits of asking these 2.5 million foreign workers to become the EPF members?”
“The Madani government must not overlook that as of June 2024, the federal government’s debt has reached RM1.2275 trillion, or 63.1 per cent of Gross Domestic Product (GDP). Meanwhile, the 2024 fiscal deficit is also projected to be 4.3 per cent of GDP, amounting to RM85.4 billion.
“Private entrepreneurs that employ foreign workers will face a significant increase in operating expenses, and even individual families need to spend more to hire domestic helpers,” he said.
Wong added the increment in the costs of hiring foreign workers was more likely to result in the reduction of local workers in order to save overall operating expenses.
Another way for enterprises to deal with the new policy, he said, was to raise prices of goods, which was undoubtedly the most undesirable situation for citizens who were already suffering from escalating cost of living.
Wong believed that members of parliament including Alice Lau Kiong Yieng (Lanang constituency) and Oscar Ling Chai Yew (Sibu constituency) of Madani goverment must understand the existing economic predicaments already faced by the people caused by inflation, depreciation of ringgit, poor economy of United States and foreign countries, etc.
He suggested that if the government’s intention was purely to take care of the basic welfare of foreign workers, it should just set up a foreign worker insurance plan that could help them cope with medical and work-related injuries.
He said local employers did not have to make a contribution of the normal 11-13 per cent of the salary of the foreign workers.
“Through such an insurance plan, not only can the basic security needs of foreign workers be met, but also the financial benefits of the Malaysian people in the EPF system can be safe guarded,” Wong, an accountant by training, added.
