Evaluating UMNO-BN - Low Wages, Losing Employment Security, Large Debts, Future Insecurity...?

UMNO-BN government failure was to ensure that the income earned by each and every Malaysians increased....If we all had a higher income, then cost of living would not be a problem, would it?

For a long time, Malaysia kept wages low to ATTRACT the foreign investor to come set up factories and businesses in Malaysia. They also weakened workers' capacity to fight for better worker rights and working conditions...

As long as the government kept the cost of living down, and affordable, most Malaysians were not bothered and allowed this. But, then there was allegations of 'kleptocracy', corruption, abuses, bad management/governing - which includes a sudden drastic increase of government borrowing, especially in the past decade, seeing our debt skyrocketing, expose of the loss of Billions of ringgit...which followed the slow removal of subsidies, increased taxation, etc ...all of which has increased the cost of living drastically...making life difficult.

NOW, Malaysians are feeling the effect of our indifference to the way the UMNO-BN government was governing the country...The BLAME is also ours - we failed to keep an eye on our government to make sure that they did the right thing to keep us all safe and financially secure now and for the future...We allowed 'wastage of money', ...and maybe even kleptocracy...so some have become very rich...and the rest of Malaysians are stuck with the problems...and also the DEBT.

Over the years, the Malaysian government

- Invaded our 'Savings for Old Age', in particular our Employees Provident Fund(EPF/KWSP) - they allowed contributors to take out from this 'savings' to spend now to buy houses, etc ...they wanted people to spend more to help our economy NOW - not so bothered about how we will survive our old age...Well, this did not affect the public servants(who will still enjoy their pensions until death) but the workers in the private sector and self employed.

- Encouraged people to buy with money that they did not have - Credit Cards were given freely to people who would never even have qualified before. Hence, many Malaysians ended up in debt - many too became bankrupt.

- Encouraged people to buy HOUSES - Well, even if the house cost RM150,000, and there was no interest charged, and the loan had to be repaid in 30 years - it would mean coming out with RM417 per month. But, the reality is that Banks charge interest, so even if the interest was 5%(of course, it is much more usually), which makes the annual interest for a loan of RM150,000 = RM7,500( RM625 a month). Now, the big problem is that UMNO-BN has failed to preserve EMPLOYMENT SECURITY - the government could have insisted on REGULAR EMPLOYMENT(employment until retirement, which will ensure financial security, wage increments, etc) - but UMNO-BN simply allowed unhindered the use of short-term contracts and 'contractor for labour', meaning that employment security is not there for many of Malaysian workers will only have a guarantee of employment for a year or 2, and then the quest to find a 'new' job - but loan-paying obligations is monthly, and default can result in you losing your house. What use is a House in one town - when your next employment in a year or so may be is some far away location? HOW MANY OF YOU REALLY OWN YOUR OWN HOUSE...or the reality is that you will only be the real owner after the loan is paid up in 10-30 years to come?

Note:- 

* Reality is that every one need Homes to stay, and it must be close to where one works and lives. Most Malaysians, because of low or uncertain long-term income at the same locality, really cannot afford houses of their own...not yet.

* Public Servants - Well, they tend to be transferred all over Malaysia - as such, what is needed is for the availability of government housing when they move to a different town.

* Other than public servants - especially those that are not earning sufficiently to afford own houses, and noting because of current employment insecurity, they too need to move from place to place as well - Well, then maybe the government should be providing low rent housing especially for those who earn less than RM2,000 - RM3,000. [Remember, one will not be able to buy houses everywhere they have to move to for employment or for other important reasons]

* Government need to ensure that affordable houses (not low cost small apartment in high rise buildings) is available for everyone. Maybe, even government loans for the first home, where unlike banks and/or financial institutions, will be open to flexibilities especially when there is a loss of employment, etc...

HOW MUCH DO MALAYSIANS EARN?

* The TRUTH is hidden when the government do not provide income statistics for individuals, let alone families(husband, wife, non-working children, dependents). Household Income is misleading for it simply tells us how much households are earning, and this could be workers 'forced' to share a house because they cannot afford their own homes, this would include working children who have to stay at home because they cannot afford their own accommodation... 

According to Shahril[CEO of EPF], more than 75% of its 14 million EPF contributors earn less than RM2,000 a month. About 15% earn between RM2,000 and RM5,000 a month, while those earning more than RM5,000 are in the top 10%.

* One effect of low or inadequate income is crime - to survive some are driven to crime...but then, UMNO-BN has also stopped giving us detailed crime statistics. It is important to know the number of thefts, robbery, purse snatching, etc. Today, we get the CRIME INDEX...but not details.

 

EPF says 80% of workers have savings below poverty line as they turn 55

13 March 2015 Print page BY SHERIDAN MAHAVERA

Malaysian workers during morning rush hour on their way to work. EFP says most Malaysians have not enough savings in their pensions fund as they reach 55, forcing many people to work into their 70s, reflecting latest global trends. – The Malaysian Insider file pic, March 13, 2015.

Nearly 80% of workers who will turn 55 this year will not have enough savings in their Employees Provident Fund (EPF) to live above the poverty line, according to figures released by the fund’s chief executive officer.

Datuk Shahril Ridza Ridzuan said for the next 20 years, the workers would not have enough in total EPF savings to enable them to live on RM800 a month, which is close to Malaysia’s average poverty line income of RM830.

This is because most of them had low wages when they started contributing to the fund in 1980s, and continued earning relatively low salaries till they turned 55, said Shahril, who did not provide a number for this batch of retirees.

The revelation shines the spotlight on the problem of low incomes among a majority of Malaysian workers, even as Putrajaya said it aims to make Malaysia a high income nation in five years’ time.

According to Shahril, more than 75% of its 14 million EPF contributors earn less than RM2,000 a month. About 15% earn between RM2,000 and RM5,000 a month, while those earning more than RM5,000 are in the top 10%.

The EPF has set RM196,800 as a savings threshold that would allow a contributor to spend at least RM800 a month for the next 20 years.

The threshold is revised every three years to take into account inflation.

Only about 20% of its contributors who turn 55 this year are expected to have RM196,800 in total savings. 

That percentage is likely to stay about the same in the coming years, said Shahril.

“Historically, we have a low wage environment, so that percentage has inched up only a little.

“This is why we tell contributors not to take out their savings till they are 60, when they really retire.

“That extra five years can earn them an extra 40% through compound interest,” Shahril (pic, right) said when met after a talk organised by the Chevening Alumni Association in Kuala Lumpur last night.

These figures, he said, reflect the new reality of working life in Malaysia, as people will have to work beyond 55 in order to save enough to live out the rest of their lives.

“This is the trend in developed countries and we are getting there. The reality is that you cannot retire and enjoy yourself at 55 any longer.”

That age was set in the 1950s and has not been changed to take into account longer life expectancies, he said, adding that these days, people expect to live through their 70s.

This trend is compounded by the fact that Malaysia is a rapidly ageing nation. In 2030, 17% of the population will be aged above 65, he said. In 2040, people aged 65 will outnumber younger individuals.

“So we need policies to deal with this, such as financial literacy training so that young people are aware of the need to save for retirement and how to integrate old workers into the market.

“These are issues that advanced economies have to deal with and we are getting there,” said Shahril. – March 13, 2015.

Source: The Malaysian Insider

*