Trade unions oppose Cabraal’s statement on EPF

By Yohan Perera

Whilst agreeing with the remark made by Advisor on Economic Affairs to the Prime Minister Ajith Nivard Cabraal that returning 20 percent of Employee Provident Fund lying to the credit of members would result in increase of money circulation some trade unions and leftist political parties yesterday said the purpose of the fund may be lost if it is implemented.   

The JVP led National Trade Union Centre Convener and President of Inter Company Workers Union Wasantha Samarasinghe said the returning 20 percent of the EPF to the benefactors will lose its very purpose. “EPF is meant for the use of private sector workers once they go on retirement. Therefore it is not advisable to use the fund to stimulate the economy,” Samarasinghe said. 

 
“ Sri Lanka should follow other countries and come up with a separate stimulus package without using EPF funds,” he added.   

However he did accept that Cabraal’s proposal will result in a increase in liquidity and enhance 
economic activities.   

Frontline Socialist Party Politburo Member Pubudu Jayagoda also said EPF funds should not be used to stimulate the economy. “ EPF is not a distress saving fund but one that is meant for the private sector workers to enjoy their retirement,” he said. 

 
“ This is similar to investing EPF funds in the Colombo Stock Exchange,” he added.   
Cabraal a former Central Bank Governor has proposed that Sri Lanka should return approximately 20% of the balances amounting to around Rs.500 billion of the Employees Provident Fund (EPF) lying to the credit of members, directly to members after the current COVID- 19 pandemic ends.

   
 “In the face of the current Covid-19 pandemic, Sri Lanka unfortunately does not now possess the fiscal space to provide a stimulus of the kind practiced by certain advanced economies, whereby huge tax refunds or outright grants have been provided to the public in order to boost consumption and other economic activity. Nevertheless, as an alternative to providing a direct fiscal hand-out, around Rs.500 billion could be infused into the economy by unconditionally returning around 20% of the EPF Member balances to the respective Members, out of the total of around Rs.2,500 billion lying to the credit of the EPF members as at 31st December 2019,” he said 
on Monday.