Daim’s insurbodination over 2% EPF cut should be lesson to all workers to reach  a single-minded May Day 2001 Resolution - make the RM185 billion EPF funds directly accountable to the 9.7 million EPF contributors and not just to one person, whether Finance Minister or Prime Minister

May Day  Message
by Lim Kit Siang 

(Petaling Jaya, Monday): All Malaysians should make a single-minded  May Day 2001 Resolution - to make the RM185 billion Employees Provident Fund (EPF) funds directly accountable to the 9.7 million EPF contributors and not just to one person, whether  the Finance Minister or Prime Minister.

Worker confidence in the competence, professionalism, accountability, transparency and integrity of the EPF in the management of their funds had  suffered unprecedented attacks by a whole catalogue of recent  EPF scandals and  fiascos,  to the extent that never have so many EPF contributors been so concerned about the safety and quality of their retirement savings, such as:
 

    1. whether EPF funds  had been involved in the final-minutes  multi-million ringgit institutional manipulation of the Kuala Lumpur stock exchange (KLSE)   through the Big Three “TMT” stocks - Telekom Malaysia Bhd, Malayan Banking Bhd and Tenaga Nasional Bhd - and the “30 seconds rally” of the stock exchange  in the first quarter of the year;
    2. the extent of involvement of EPF funds in the buy-outs and bail-outs of crony companies and individuals like Renong, UEM, Time Engineering, CAHB, Time dotCom, Halim Saad, etc.
    3. why and the extent of the use of nominee companies by  EPF  to invest in the stock market.
    4. the full list of beneficiaries of the RM37.63 billion loans given out by EPF;
    5. the full list of the RM39.46 billion shares transactions in the stock market.


The fiasco of the unlawful 2% cut of employees’ EPF contribution has highlighted the need for major amendments to the EPF Act 1991 to ensure that the RM185 billion EPF funds are directly accountable to the 9.7 million EPF contributors and not just to the Finance Minister so that they will not suffer in any political battle between the Finance Minister and Prime Minister.

This is what happened over the 2% cut of employees’ EPF contribution announced by  the Prime Minister in the RM3 billion economic stimulus package as a counter to the US economic slowdown.

Although the Prime Minister had announced on March 27, 2001 that the two per cent EPF cut would be effective from April 1, 2001,  in an act of insurbodination and challenge, the Finance Minister, Tun Daim Zainuddin did not sign and gazette the Ministerial order for the variation of the Third Schedule of the EPF Act 1991 on the minimum statutory rate for workers’ contribution before March 31 for it to come into force on April 1, 2001.

The contretemps over the failure or refusal of Daim to sign and gazette the Ministerial order over the 2% cut in employees’ EPF contribution cannot be the cause but merely the symptom of the Mahathir-Daim showdown, resulting in the bizarre “leave” of Daim as Finance Minister for two months from the Cabinet.

Daim is playing a losing hand in the stand-off with Mahathir and he is sending out messages of reconciliation, and he signed the Ministerial order for the 2% EPF cut  at the end of last week but as today, it has not  yet been gazetted.

The law is very clear that the Finance Minister’s order to vary the minimum statutory rate of contribution can only come into effect when it has been gazetted, and as there is no provision for  the Minister to make any variation with retrospective effect, this would mean that the 2% EPF cut can only come into effect from June 1, 2001 as the gazette can only be published after May 1, 2001.

This episode should be an eye-opener as to why it is imperative that all workers should make a single-minded May Day 2001 Resolution to demand amendments to the EPF Act  to make ensure that the EPF funds, which would touch RM200 billion by the end of the year, are directly accountable to the 9.7 million EPF contributors and not to one man - be he the Finance Minister or Prime Minister.

(30/4/2001)

*Lim Kit Siang - DAP National Chairman