Replace EPF loan scheme with rent-to-own, suggests Pakatan
(THE MALAYSIAN INSIDER) – Putrajaya could help council tenants buy homes by offsetting their monthly rental against the purchase price instead of borrowing RM1.5 billion from the Employees Provident Fund (EPF) to set up a new loan scheme.
Pakatan Rakyat (PR) leaders also suggested that the federal government could charge the unqualified home buyers a nominal interest on their loan, similar to the deal it offered the National Feedlot Corporation (NFCorp) for a RM250 million soft loan to run a cattle-farm business in Gemas, Negri Sembilan.
They offered these suggestions today as examples of what they see as equitable funding solutions to the government’s controversial proposal of offering loans to unqualified buyers using money from the pension fund.
The PR MPs also questioned why the EPF loan scheme was not included in the 2012 Budget which had been approved in Parliament last year, saying that the “sudden” announcement validated perceptions of it being a “vote-getting” scheme by Barisan Nasional.
Federal Territories and Urban Well-being Minister Raja Datuk Nong Chik Raja Zainal Abidin had blamed opposition lawmakers for making “baseless” allegations on the matter, but refused to disclose why Putrajaya was resorting to borrowing money from the workers’ retirement fund.
“Taking Raja Nong Chik’s statement at face value, I propose that the government consider these two options, which the government can rightly consider, since, according to Raja Nong Chik, the Treasury has the money,” PKR vice-president Nurul Izzah Anwar said in a statement today.
She said a more equitable funding mechanism could be used, called a “Rent-to-Own and Zero Interest Scheme”, whereby interested home owners would pay a flat RM145 per month to Kuala Lumpur City Hall (DBKL) for 20 years in order to pay up the cost of RM35,000 for a low-cost unit.
The Lembah Pantai MP said this approach would fulfil a “people-centric” economic goal since the units offered have already been built and currently occupied with the construction costs already accounted for.
“This scheme would also eliminate any further administration cost as the existing monthly rental collection system in use can remain. This is a win-win concept for all stakeholders,” said the PKR leader, adding that it should also be expanded to include all Malaysians who qualify under the lower-income category.
A second alternative funding option, she said, was for the federal government to offer a two per cent interest rate soft loan for the project, similar to the kind given to NFCorp for the cattle-farming project.
“Based on an annual 6.5 per cent interest rate for a 25-year loan tenure would increase the price of the units from RM35,000 to RM70,800 compared to an annual two per cent interest rate levied for 25 years of just RM44,400.
“The minister should respond as to why wasn’t the same loan consideration for the NFC extended to the rakyat in this scheme. It would seem that the minister’s announcement of a 10 per cent default rate is connected to the 6.5 per cent high interest rate charged to the low-income earners,” added Nurul Izzah.
She said a referendum should also be held for residents who will be applying for the EPF home loan scheme to see whether they would prefer other options.
“Finally, I accept the minister’s challenge to an open debate which should be titled ‘Which is the best funding option for PPR-PA home ownership?”. This debate should also be telecast live on television, similar to the live telecast of the debate between the Penang chief minister and MCA president by Astro,” Nurul Izzah said.
