Guan Eng: More funds needed to plug Budget 2018 shortfall

PARLIAMENT | Finance Minister Lim Guan Eng said the Supplementary Supply Bill (2018) 2019 was necessary to plug a shortfall in the Budget 2018.

In all, the finance minister is asking Parliament to approve an additional budget of RM19.6 billion.

In tabling the motion for second reading today, he said RM6 billion was required for commitments made by the previous administration that was not budgeted for.

Among others, this included an RM1.4 billion payment for the takeover of the Eastern Dispersal Link (EDL) in Johor, and an RM1 billion allocation for KTMB's double tracking project.

Lim said another RM4 billion was needed to finance various off-balance sheet debt.

Among others, RM2.5 billion will pay for Danainfra National Bhd's debts and RM1.1 billion for private finance initiative payments.

Danainfra is the Finance Ministry-owned company used to borrow money for the MRT projects.

Last year, the Finance Ministry had to repay loans undertaken by 1MDB and SRC International Sdn Bhd, which Lim said were also paid through off-balance sheet methods. 

The balance of RM9 billion, he added, was not additional funding per se, and instead involved the restructuring of certain operational expenditures to development expenditure.

Lim told the Dewan Rakyat that the federal government has increased the fiscal deficit target to 3.7 percent, up from 2.8 percent targeted by the previous administration.

"Although the government has tried its best to reduce cost and delay non-critical expenditure, it is not realistic to achieve a deficit target of 2.8 percent in 2018.

"This increase is caused by financial commitments made by the previous government which were not budgeted for in the Federal Expenditure Estimate 2018 and off-balance sheet debt service payments," he said.  - Mkini