Zafrul denies Emergency Ordinance used to spend over debt limit

 

The government has never used the Emergency Ordinance to raise revenue or increase spending beyond the statutory debt ceiling approved by Parliament in August 2020, Finance Minister Tengku Zafrul Abdul Aziz said.

Parliament voted in August last year to increase the debt limit to 60 percent of gross domestic product from 55 percent previously.

Zafrul said government loans amounted to RM81.8 billion as of April 2021 and about RM99.3 billion as of this month, not RM115.53 billion as claimed by certain quarters.

“All government loans are based on expenditures approved by Parliament during the Budget 2021 tabling,” he said in a video posted on Facebook today.

In the post, he denied various claims, including that the government had raised RM115.53 billion up to May 2021 in order to spend at will and that the government’s borrowings and spending activity lacked transparency amid the state of emergency.

On funds raised by Petronas and Khazanah Nasional Berhad, Zafrul said the companies took the loans for their respective capital and cash flow requirements.

“These are their debts, not the federal government’s debts,” he stressed.

He also explained that the government did not obtain off-balance sheet financing, unlike the previous government whereby the federal debt jumped more than 120 percent between 2008 and 2017 while total government guarantees surged by over 240 percent.

On legacy debts of 1Malaysia Development Berhad (1MDB), SRC International and Suria Strategic Energy Resources (SSER) amounting to over RM40 billion, Zafrul noted that RM15.5 billion of 1MDB and SRC’s debts had been repaid by the government to date.

However, there remains more than RM42.3 billion in debts comprising both principal and interest.

“Just imagine how many people we could have helped during this pandemic if this amount of nearly RM58 billion were available for use.

“Don’t mean to stir up (something unpleasant), but this is highly relevant to the national debt issue and the government’s fiscal ability to assist the people,” he explained.

- Bernama