KUALA LUMPUR – The Finance Ministry (MoF) has tabled the Temporary Measures for Government Financing [Coronavirus Disease 2019 (Covid-19)] (Amendment) Act 2021 for the second reading in the Dewan Rakyat today.
The bill aims to increase the federal government’s statutory debt limit from 60% to 65% of gross domestic product (GDP), which would allow it to raise the ceiling cap for the Covid-19 fund from RM65 billion to RM110 billion.
The additional allocation is needed to fund the four aid and stimulus packages – namely the Malaysian Economic and Rakyat’s Protection Assistance Package, National Strategic Programme to Empower the People and Economy (Pemerkasa), Pemerkasa Plus and the National People’s Well-Being and Economic Recovery Package (Pemulih) – announced by the government since the beginning of the year.
Finance Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz said the packages require an additional allocation of RM27 billion, adding that the fund will be used for development projects under the 12th Malaysia Plan (12MP) to ensure the nation’s recovery remains on track.
He said as of September 2021, the government has spent RM60 billion of the RM65 billion allocated for the Covid-19 fund and the balance is insufficient to fund the packages announced this year.
Given the additional funds required, as well as the current economic performance and the statutory debt limit for this year and 2022, it is appropriate for the Temporary Measures for Government Financing (Coronavirus Disease 2019) Act 2020 to be amended, the finance minister said.
He added that in the medium term, the government remains committed to the fiscal consolidation measures outlined under the 12MP, with the deficit targeted to be reduced to 3.5% of GDP by 2025.
Tengku Zafrul said the bill encompasses three clauses, which include the proposed estimated additional expenditure of RM45 billion.
Among other things, RM12.7 billion of the RM45 billion will be used to accommodate additional allocation for the Wage Subsidy Programme, which was raised from RM18.3 billion to RM31 billion under the Pemerkasa, Pemerkasa Plus and Pemulih packages.
Meanwhile, RM15.8 billion will be utilised as additional allocation for Bantuan Prihatin Nasional, raising it to RM41 billion from RM25.2 billion previously after taking into account accepted appeals for the assistance and the increase in distributions under Pemerkasa and Pemerkasa Plus.
“Additionally, a total of RM2 billion will be used to increase small-scale project allocations for G1 to G4 contractors from RM4 billion to RM6 billion, in line with the government’s aim to boost economic activities and reinvigorate the country’s economy,” he said.
Furthermore, RM3.6 billion will be utilised as additional allocations for the Prihatin SME Grant, which has been raised from RM2.4 billion to RM6 billion.
In addition, RM4 billion is needed to increase allocation for the Health Ministry for Covid-19-related expenditure from RM5 billion to RM9 billion, while RM5.9 billion is to increase social assistance support for the vulnerable from RM110 million to RM6.01 billion.
Tengku Zafrul called upon Dewan Rakyat members to give their full support for the amendment to help the people in their financial recovery from the Covid-19 crisis.
The bill was tabled for the first reading in the Dewan Rakyat by Deputy Finance Minister Mohd Shahar Abdullah on September 28. – Bernama, October 11, 2021
