The provident fund has ushered in a "new reform" and raised wages, which is a matter of the homeless
Provident fund, this term is not unfamiliar to most people, especially those who enter the workforce, and it will be seen on the pay slip every month. Although the provident fund is regarded as a benefit for employees because the company will give a certain amount of subsidies, in reality, many people feel that their wages have been cut by the provident fund, which makes the already poor income even more stretched. At the same time, many enterprises are also feeling the pressure brought by the provident fund. In recent years, there have been increasing calls for reducing the burden on enterprises, reducing the proportion of provident fund contributions, and even abolishing provident funds.
With the advancement of the housing market, the state no longer allocates housing to enterprise workers, and enterprise employees need to solve the housing problem on their own. In this context, in 1991, Shanghai took the lead in introducing the Chinese version of the housing provident fund by borrowing from Singapore's "Central Provident Fund" system, and soon promulgated the "Regulations on the Administration of Housing Provident Fund" at the national level in 1994. Originally, the main use of the provident fund was to buy a house, but over time, its use gradually expanded, and today it can be used not only to pay rent, but also to withdraw it for medical expenses in the event of a major illness.
By gaining an in-depth understanding of the development process and original purpose of the provident fund system, we can more fully understand its important role in modern society. The provident fund not only provides a platform for employees to accumulate housing funds, but also reduces the pressure of buying houses to a certain extent and promotes the healthy development of the housing market.
It is not in the face of the current high housing prices, the provident fund, which is regarded by the general public as a right-hand man to buy a house and repay the mortgage. The low interest rate on its loans is remarkable. Imagine a loan of $800,000, and the total interest generated by the CPF loan is only $430,000 over a 30-year repayment period of equal principal and interest, compared to a commercial loan, which is much higher. What's more humane is that the provident fund can not only be used for housing loans, but also can be directly deducted from housing loans, which undoubtedly greatly reduces the repayment pressure for many families. Especially in cities where housing prices are relatively affordable, for families where both husband and wife have CPF, paying off the mortgage has become almost an easy task, making their lives more relaxed.
Huang Qifan, Dong Mingzhu and others suggested abolishing the provident fund
Nowadays, the provident fund system poses a lot of economic pressure on many enterprises and employees, and there is an urgent need for in-depth reform. In response to a reporter's question, Huang Qifan, vice chairman of the China Center for International Economic Exchanges, said: "As a part of the social public welfare system, the provident fund came into being in a specific historical and national context, and its inspiration came from Singapore. However, with the gradual marketization of the real estate market in mainland China, commercial banks have become the main force of housing loans. As a result, the original meaning of CPF has gradually diminished. The abolition of the provident fund will reduce costs for businesses by up to 12%. ”
Not only Huang Qifan, but also Dong Mingzhu, chairman of Gree Electric Appliances, also expressed similar views in an interview. "I will also raise the issue of CPF at the upcoming meeting," she said. I fully agree with Wong Kee Fan that the provident fund system should be abolished. In my opinion, there is no need for the housing provident fund to exist. In the case of our company, we provide housing for our employees, thus eliminating the need for CPF. Obviously, Dong Mingzhu also strongly supports the abolition of the provident fund, and believes that it is no longer meaningful.
There are different opinions on whether to abolish the provident fund system
On the one hand, the provident fund system is embraced by many people. They believe that the provident fund, as a welfare policy given by the government to employees, can accumulate a considerable wealth in the long run through the joint contribution of individuals and enterprises. Especially when it comes to buying a home, the low interest rate of a CPF loan (only 3.25%) can greatly reduce the financial pressure. In addition, the provident fund can also be used to pay rent and the treatment of major diseases in some provinces, which has great practical value for the majority of ordinary workers.
However, on the other hand, there are also those who advocate the abolition of the provident fund system. They believe that CPF has become a heavy burden for individuals and businesses. In the case of low wages, employees often feel stretched thin after deducting the provident fund. At the same time, enterprises have also borne a lot of economic pressure because of the contribution of provident fund. After the abolition of the provident fund system, companies can reduce the burden and increase the wages of employees. Moreover, in the face of today's soaring housing prices, the amount of provident fund contributions is a drop in the bucket, and the help for buying a house is limited.
In fact, everyone understands that the provident fund that enterprises most want to cancel is actually of great significance to the majority of employees. The existence of the provident fund is not only a benefit given by the enterprise to the employees, but also an important system established by the state for the people's housing purchase and housing security. The data inexorably proves that in 2022, as many as 67,826,300 people across the country benefited from it and withdrew their provident funds. In addition, the Ministry of Housing and Urban-Rural Development, the Ministry of Finance and the Central Bank released the "2022 Annual Report on the National Housing Provident Fund", which shows that the number of employees who pay the provident fund has climbed to 169.7957 million, and the number of personal housing loans issued in 2022 is as high as 2.4775 million, and the amount is even more astonishing 1.184187 billion yuan.
Behind these figures, it reflects the weight of provident fund in the hearts of ordinary people. It is not only a deposit that can be withdrawn, but also a guarantee for many people to realize their dream of buying a house and a stable life. Therefore, when job seekers choose jobs, they often give preference to those positions that provide five insurances and one housing fund, which fully illustrates the irreplaceable status of provident fund in people's hearts. We should not be misled by some superficial views that abolishing the CPF will be beneficial to businesses and workers. In fact, the existence of the provident fund system is to better protect the rights and interests of employees and promote social fairness and harmony.
We should cherish and continue to improve this system so that more people can benefit from it. Therefore, it is not a wise move to abolish the provident fund, which will greatly harm the interests of the working people, and the vast majority of people are opposed to abolishing the provident fund. For example, an organization conducted a poll on whether to abolish the provident fund, and its statistics showed that less than 30% of netizens voted "in favor of abolishing the provident fund", while more than 70% of netizens firmly "opposed the abolition of the provident fund system". It can be seen that the provident fund system, as a welfare treatment for employees, has obvious advantages and disadvantages, and obviously its advantages outweigh the disadvantages.
Of course, some aspects of the CPF do need to be improved, such as its relatively inefficient use, which makes it seem that for people who do not plan to buy a home, paying into the CPF seems to indirectly reduce their real income. Although the CPF can eventually be withdrawn, this long-term protection is often difficult to cope with the immediate needs, as if water is far away from quenching the thirst of the near. In addition, there are many restrictions on the use of CPF. Many people find themselves in trouble when buying a home, either because they are unable to use their CPF loans, or because their CPF loans are not sufficient to cover their needs, or because their CPF cannot be used across regions. There are even those who want to convert a business loan into a CPF loan, but this also faces a number of constraints.
However, despite these shortcomings of CPF, having CPF is still a valuable benefit for most people. Especially in the context of the current skyrocketing housing prices, the provident fund has become an effective means to reduce the cost of buying a house. Therefore, we should not only see the shortcomings of the provident fund, but also see its important role in the process of buying a house. The provident fund not only provides people with a kind of financial security, but also helps people realize their dream of buying a house to a large extent.
On the question of canceling the provident fund, the Ministry of Housing and Urban-Rural Development has clarified the answer
As early as the end of 2020, Wang Menghui, Minister of Housing and Urban-Rural Development, wrote an article entitled "Promoting Urban Renewal Actions", in which he clearly proposed: "We must deepen reform, improve the housing provident fund system, and benefit more people by expanding the scope of contribution and use, and improve the efficiency of the use of the provident fund." This statement clearly shows that for the future of the housing provident fund, reform will become the main theme, not cancel.
Looking ahead, the housing provident fund will not only be retained, but also expanded through a series of reform measures to expand its coverage and use. In view of the various problems existing in the existing provident fund system, the state has paid close attention to it and actively promoted reform. For example, at present, the provident fund between many cities has begun to realize the interconnection, gradually breaking the geographical restrictions, making the use of the provident fund more convenient and efficient.
The reform of the housing provident fund system has made "salary increase" no longer a dream, and the houseless people welcome the era of dividends
With the in-depth reform of the housing provident fund system across the country, major cities have successively introduced favorable policies, bringing unprecedented benefits to the majority of employees. These reform measures have not only greatly broadened the use and scope of the provident fund, but also virtually brought substantial wage increases to employees. Specifically, the maximum contribution limit for the CPF has been significantly increased.
As of January 2024, more than 160 cities across the country have adjusted the upper limit of provident fund contributions. In the bustling city of Shanghai, for example, the maximum CPF contribution limit has been raised to 28,000 yuan, an increase of 4,500 yuan compared with last year. This may seem surprising, but in practice, it means a significant increase in the CPF benefits of employees.
Let's take an employee working in Shanghai as an example, let's say that his CPF contribution limit was 23,500 yuan in the past, and his monthly salary was 30,000 yuan. In the case of enterprises and individuals paying 12% of the provident fund, enterprises used to need to contribute 2,820 yuan for employees. However, with the increase in the contribution limit to 28,000 yuan, enterprises are now required to contribute 12% of their employees' provident fund, or 3,360 yuan, according to the new standard, an increase of 540 yuan from before. This increase of 540 yuan has undoubtedly brought substantial wage increases to employees.
As an important welfare treatment for employees, the provident fund is not only related to the housing problem of employees, but also affects the quality of life of employees to a certain extent. The reform and improvement of the provident fund system is not only a strong guarantee for the rights and interests of employees, but also a vivid embodiment of social fairness and justice.
To sum up, although some enterprises have called for the abolition of the provident fund system out of their own interests, the existence of the provident fund is undoubtedly of great significance from the perspective of the majority of employees. It can not only effectively reduce the pressure of housing purchase and the burden of repaying mortgages, but also an important part of employees' wages. Looking forward to the future, with the continuous development and improvement of the provident fund system, we have reason to believe that it will bring more benefits and convenience to the majority of employees, so that "salary increase" and buying a house are no longer unattainable dreams.