Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz addresses members of Parliament in Kuala Lumpur October 11, 2021. — Bernama pic
KUALA LUMPUR, Oct 20 — The additional RM45 billion fiscal injection into the economy agreed to by the government in the memorandum of understanding (MoU) between the prime minister and Pakatan Harapan (PH) must not be hijacked for political purposes to fulfill pet projects, DAP secretary-general Lim Guan Eng said today.
Lim said instead it must be given out in the form of direct grants to small-medium enterprises (SMEs), as well as the tourism and construction industry that lost a total of RM213 billion due to the impact of the Covid-19 pandemic.
“Even if the government is not considering interest rate waivers, they should consider a reduction of interest rate by at least 2 per cent for the beleaguered SMEs, construction and tourism industry.
“In the meantime, there is an urgency to release these RM45 billion in funds to the SMEs, tourism and construction industry as soon as possible to allay concerns that these funds may be utilised for political purposes, particularly with the upcoming Melaka state general elections,” he added.
On October 11, the Ministry of Finance tabled the Temporary Measures for Government Financing [Coronavirus Disease 2019 (Covid-19)] (Amendment) Act 2021 for the second reading in the Dewan Rakyat.
The Bill aimed to increase the federal government’s statutory debt limit from 60 per cent to 65 per cent of gross domestic product, which would allow the government to raise the ceiling cap for the Covid-19 Fund from RM65 billion to RM110 billion.
Bernama had reported that the additional allocation is needed to fund the four aid and stimulus packages, namely the Malaysian Economic and Rakyat’s Protection Assistance Package (Permai), 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.
In the report, Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz said the packages required an additional allocation of RM27 billion, and added that the fund will also be used for development projects under the 12th Malaysia Plan (12MP) to ensure that the nation’s recovery remains on track.
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 per cent of GDP by 2025.
The Bill encompasses three clauses, which included the proposed estimated additional expenditure of RM45 billion.
Among other things, RM12.7 billion of the RM45 billion will be used to accommodate the 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 the Bantuan Prihatin Nasional, raising it to RM41 billion from RM25.2 billion previously after taking into account the appeals for the assistance which which were accepted and the increase in distributions under the Pemerkasa and Pemerkasa Plus.