Motion to raise the debt ceiling to 65pct approved by Dewan Rakyat

 

PARLIAMENT | The motion to increase the statutory debt ceiling from 60 percent to 65 percent of the Gross Domestic Product (GDP) was unanimously passed by the Dewan Rakyat today.

Earlier, Finance Minister Tengku Zafrul Abdul Aziz said this is in order to fund additional spending for the Kumpulan Wang Covid-19 (KWC) as well as the 12th Malaysian Plan (12MP) projects.

He also said that the government decided to raise the debt ceiling again because it was RM5 billion short of reaching the 60 percent threshold in September.

The government had previously increased the debt ceiling from 55 percent to 60 percent last year.

“Based on the current position of the KWC, the Finance Ministry is projecting that this year’s allocation is insufficient to fund aid packages.

“RM60 billion has been spent and the remaining debt ceiling at the end of September stood at merely RM5 billion,” Zafrul said while tabling the second reading on amendments to the Temporary Measures for Government Financing (Covid-19)(Amendment) 2021 in the Dewan Rakyat earlier today.

The debt ceiling can be extended by Finance Ministry

During his winding-up speech later, Zafrul had explained that this increased debt ceiling of 65 percent would automatically expire at the end of 2022.

However, if the government sees a need for the debt ceiling to remain at 65 percent past 2022, this could be done through a gazette by the Finance Ministry.

“If we need to set the debt ceiling at 65 percent again (after its expiry at the end of 2022), this can be done through a gazette by the Finance Ministry.

“There is no need to bring it back here (to Parliament),” Zafrul said, in response to a question from Dr Dzulkefly Ahmad (Harapan-Kuala Selangor) who had asked whether the amendment is a temporary measure, and if so, when it would lapse.

Zafrul also gave his assurance that the government has no plan to further raise the debt ceiling beyond 65 percent.

Now that the motion has been approved by the Dewan Rakyat, it will go to the Dewan Negara, where it will undergo another three rounds of reading before being voted on. - Mkini