KUALA LUMPUR – The RM5 billion that the government is taking from the National Trust Fund (KWAN) for Covid-19 vaccine-related uses comes from the investment generated, but the principal amount of RM10.4 billion remains untouched.
In a presentation to selected media organisations today, Finance Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz said Malaysia has to dip into KWAN to fast-track the vaccination programme, and much of it is due to fiscal prudence.
Earlier today, Khairy Jamaluddin, the coordinating minister for the National Covid-19 Immunisation Programme, said RM3 billion is for vaccine procurement and RM2 billion to implement the scheme.
Tengku Zafrul said the country has inherited more than RM1 trillion in debts and liabilities, including guaranteed loans such as 1Malaysia Development Bhd and private financing initiative (PFI) debts.
“For example, 1MDB’s debt obligation of RM40 billion is eight times the cost of the vaccine.
“Many politicians who were in the previous administration have asked the Perikatan Nasional government why KWAN funds are being used, and not more borrowing done.
“As a responsible government, we need to balance short-term recovery with long-term sustainability. The well-being of the people is the government’s main focus, but it has limited fiscal ability.
“So, what is the best option that the PN government can take after inheriting obligations to repay liabilities, such as PFI via off-balance sheet, 1MDB, SRC (International Sdn Bhd) and others estimated to exceed RM20 billion a year, for the next five years?
“Also, we do not want to burden future generations with excessive and undue debt. As is the case now, the government has to bear debt-servicing charges on legacy debt, as well as liabilities made on an off-budget basis in the past.”
He said the money incurred from debt servicing can be better used to fund the people’s needs, such as financial aid, wage subsidies, Prihatin grants and Covid-19 vaccines.
The jab is key to economic recovery, he said, adding that KWAN was established in 1988 with the aim of protecting future generations.
“The amendment to the National Trust Fund Act 1988 (Act 339) through the emergency ordinance allows KWAN funds to be used for the procurement of vaccines and any related expenses incurred for any outbreak of infectious diseases.”
Last November, Tengku Zafrul announced that the government would prepare RM3 billion for pandemic-related uses, but the sum was not included in the RM322.5 billion Budget 2021.
Shortly after the Pakatan Harapan administration took over on May 9, 2018, former prime minister Datuk Seri Najib Razak criticised Tun Dr Mahathir Mohamad for spooking investors by declaring that the national debt stood at RM1 trillion.
Then finance minister Lim Guan Eng had to explain that the RM1 trillion comprised official federal government debt (RM686.8 billion) and the commitment to pay RM199.1 billion in government guarantees, as well as lease payments for several private-public partnership projects amounting to RM201.4 billion.
Najib said the PH government inflated the size of the national debt.
In a Facebook post on May 25, 2019, he said: “I am glad that the finance minister came clean in his statement yesterday, that the official federal government debt remains at RM686.8 billion (US$172.5 billion) (50.8% of gross domestic product) – not 65% or RM1 trillion as previously claimed.
“The level of 50.8% is much lower than the 103.4% reached during the first reign of Tun Mahathir.” – The Vibes, April 26, 2021
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