Covid-19 fund expenditure ceiling increased to RM110bil

KUALA LUMPUR: Putrajaya decided to raise its statutory debt ceiling to 65% of the gross domestic product (GDP) as it was RM5bil short of reaching the threshold in September, says Tengku Datuk Seri Zafrul Abdul Aziz.

The Finance Minister also said the government had spent RM60bil for various programs to combat the pandemic since the start of the year.

"Based on the current position of Kumpulan Wang Covid-19 (KWC), the Finance Ministry is projecting that this year's allocation is insufficient to fund aid packages.

"RM60bil has been spent and the remaining debt ceiling at the end of September stood at merely RM5bil," he said when tabling the second reading on amendments to the Temporary Measures for Govt Financing (Covid-19) (amendment) Bill in Parliament on Monday.

Factoring in the country's economic performance and statutory debt limit for this year and next year, Tengku Zafrul said amendments were necessary to the proposed bill to increase KWC's debt ceiling to RM110bil.

This, he said, would fund additional KWC spending, which amounts to RM45bil, as well as 12th Malaysian Plan (12MP) projects.

He said that the previous debt ceiling, which was raised to 60% of the GDP in 2020, was made to fund several measures in Budget 2021 and four government packages – Prihatin, Prihatin PKS Tambahan, Penjana and Kita Prihatin.

"We were facing the Covid-19 pandemic at the start of the year. As a proactive measure, the government implemented four stimulus packages – Permai, Pemerkasa, Pemerkasa Tambahan and Pemulih."

The four programs, he said, required an additional allocation of RM27bil.

"Therefore, amendments to the Bill and raising the statutory debt limit is very important to fulfil the following commitments, as well as to fund measures for this year and 2022 to ensure that the momentum of recovery can be maintained," he said.

Tengku Zafrul said the government had implemented aid packages and economic stimulus programs amounting to RM530bil since the Covid-19 pandemic began last year.

"This covers both fiscal and non-fiscal measures and it has benefitted more than 20 million people as well as 2.4 million businesses."

This is the second time in two years the government has sought to raise its debt ceiling.

In 2020, it was raised to 60%, the first increase since July 2009.