MPs approve Covid-19 financing and rise in debt ceiling

The Covid-19 temporary measures bill was tabled by Tengku Zafrul Aziz. It was approved by the Dewan Rakyat today. (Facebook pic)

KUALA LUMPUR: The Dewan Rakyat has approved an increase in the national debt ceiling, for the first time in more than a decade, among other temporary financial measures to cope with the economic fallout from the coronavirus pandemic.

The increase in debt level is included in the Temporary Measures For Government Financing (Coronavirus Disease 2019 (Covid-19)) Bill 2020 which was passed at the policy level after a debate in the house.

The bill, tabled by Finance Minister Tengku Zafrul Aziz was approved by a majority vote after the third reading.

It must now be approved by the Dewan Negara and receive royal assent before it becomes law.

The bill provides for the government to borrow up to 60% of gross domestic product. The last such increase was in July 2009 during the global financial crisis, when maximum borrowings were increased to 55% of GDP.

The bill enables government financing for economic stimulus packages and recovery plans and related matters, amounting to about RM295 billion, which includes a fiscal injection of RM45 billion, Tengku Zafrul said.

Measures under the bill expire at the end of 2022.

When winding up the debate, Tengku Zafrul said that the payment of special allowances for the Health Ministry’s frontliners had been adequately provided.

“The government is aware that complaints of late payment of allowances have been received. The Finance Ministry has discussed with the Health Ministry to facilitate the process of claiming allowances for example allowing the approval of claims to be delegated to the heads of department.

“The Finance Ministry will continue to assist in this matter to ensure that the arrears of allowance payments are reduced,” he said in response to a question from Dr Kelvin Yii (PH-Kuching) regarding complaints of delays in the payment of allowances.

The temporary measures include RM11.2 billion for the Bantuan Prihatin Nasional programme, small-scale projects (RM4 billion), and RM2 billion each for skills enhancement programme and Penjana SME Financing, Prihatin SME Grant (RM1.9 billion), electricity bill discounts (RM500 million), special aid for varsity students (RM300 million), and public transport subsidy (RM200 million).