February 9, 2018
By Salahuddin bin Hisham
LEMBAGA Tabung Haji (TH) had just announced their Islamic dividends and bonus.
Despite laggard market conditions for 2017 – about RM400 million written-off for Tabung Haji Heavy Engineering Berhad losses and a significant rise in subsidy for pilgrims from RM160 million for 2016 to RM298 million for 2017 – it was a credible annual Hibah of 4.50 per cent and Hibah Haji of 1.75 per cent.
Tabung Haji earned RM2.8 billion, in which almost all, but zakat and RM100 million for cost, is disbursed.
It is rather disheartening and puzzling to hear demeaning media social comments equating it as SPM 3rd grade performance.
It should be clearly understood that Tabung Haji’s Hibah is a gift and has similarity with Wadiah account in Islamic banking and equivalent to savings accounts of commercial banks. To those unaware, savings account interest rate is a paltry 1.75 per cent.
Comparatively, the Employees Provident Fund (EPF) gave a dividend of 5.75 per cent for 2016 and it is expected to be 6 per cent for 2017.
Permodalan Nasiona Berhad (PNB) gave 8.25 sen per unit of ASB for 2017.
Both institutions underperformed to Bursa Malaysia’s Composite Index rise of 9 per cent for 2017. For such risk profile, it is impossible to outperform the CI.
Tabung Haji is more risk averse and (with) compliance requirements.
Only an SPM 3rd grader would not know that.
Considering the more restrictive Syariah compliance and portfolio mix, total Hibah of 6.25 per cent for the first time Haj goers, is commendable. Compared to banks’ saving accounts and fixed deposit returns, there is no withholding tax on Tabung Haji account.
Add the withholding tax to the 6.25 per cent, bank savings and deposit returns are relatively paltry.
Another issue being raised by instant noodle financial experts on social media is the calculation of Hibah using annual minimal balance.
It cannot be a big lie as alleged by sensationalists and political media social commentators. First, it was clearly mentioned in the statement from Tabung Haji. Second, there was no deceptive terms or play of words.
Did these SPM 3rd graders actually pass their PMR?
Tabung Haji has made it clear that the Hibah “gift” is given to loyal depositors. Hibah Haji is meant for depositors that has not yet performed the obligatory Haj.
In not so many words, the pilgrims’ board is adhering to the objective of its establishment as a long-term savings mechanism for Muslims to perform the Haj.
Tabung Haji account is not Wadiah or bank savings account that one regular withdraws and deposits money.
If this is a new policy, it is much appreciated and high time this long overlooked matter be corrected.
Quite sure these SPM 3rd graders with questionable PMR certificates do not know. For too long, significant numbers of Haj pilgrims would only deposit their RM9,980 with LUTH when their turn is up and ready to go for their Haj.
They get the same subsidy, and privileged services as other long-term depositors of LUTH. It is unfair and the Hibah payment structure has partly addressed this injustice.
This leads to the next issue of Haj subsidy. It would surely turn the emotionally inclined, factually deficient but quick with their accusations into a frenzied lot.
The current cost of a pilgrim under the muassasah is RM22,450 and a pilgrim only pays for RM9,980. That makes the subsidy for each muassasah pilgrim to be RM12,470 or 55.5 per cent, which is more than half the cost.
Considering that subsidy cost per pilgrim in 2008, just 10 years ago, was only RM2,346 or 20.76 per cent, is it not too much?
The fundamental prerequisite that made it compulsory on Muslims to perform the Haj is affordability.
One fair argument is: If Malaysian Muslims need to be effectively subsidised for more than half the cost from the earnings meant for Hibah for other depositors, Haj is no more compulsory upon them.
Why the need for LUTH to subsidise?
To make the decision to stop the subsidy, it would be suicidal on the ruling party to make that policy. It can be considered a political policy decision.
A legitimate argument against such view would be technical, that is basically saying – Hibah is a gift and at the discretion of LUTH.
Other arguments would be to say there is nothing wrong for the government or agent of government to provide social subsidy for pilgrim.
Both sides of the argument are equally valid.
However, consider that the nearby Egyptians paid US$10,000 per person for their Haj in 2011. That was the year yours truly performed the Haj under muassasah. The hotel the Egyptians were staying was 100 feet away from ours.
Compared to others in the region, the cost to perform Haj via muassasah for Malaysians is relatively low. Singaporeans have to pay commercial price equivalent to RM15,000 to RM20,000 per person. Despite the same exchange rate as Singapore, it is more expensive for Bruneians.
Indonesian pay equivalent of RM10,000 per person for their once-in-a-lifetime chance for Haj to their pilgrim board. However, that does not include food. LUTH spent RM6,000 for food and lodging for each muassasah pilgrim of LUTH.
The conclusion from the facts presented is simply not to do nit-picking on LUTH, including the unnecessary fuss over the dividend and bonus payments.
It is as irresponsible as Rafizi Ramli’s’s slanderous expose of LUTH that turned out to be wrong and caused alarm and panic, sending depositors to withdraw their savings and lost their queue for the Haj.
He is currently facing lawsuit from LUTH to add to his string of lawsuits.
LUTH is an exemplary organisation that has done well to achieve the goals set out as a saving institution for potential pilgrims.
When it is their turn to perform the pilgrimage to Mekah, LUTH made the spiritual journey to be affordable, comfortable, and a well-managed experience.
It is beyond the Saudis to continue subsidising foreign guests. Costs may escalate further in the future due to the expansion of the Masjidil Haram complex.
So – be grateful for now.