This includes the RM3 billion for vaccine purchase first announced in his 2021 annual budget speech.
He also clarified that the RM3 billion mentioned in his speech last November was never part of the over RM300 billion budget.
In a media briefing today, Tengku Zafrul said the initial RM3 billion was only an estimation and had yet to be finalised at the time.
He explained that the cost had increased as the government was now aiming for the National Covid-19 Immunisation Programme to be completed by the end of this year, instead of February 2022 as originally planned.
This included spending more on additional vaccine doses, outsourcing private medical practitioners, renting vaccination centres and allowances for programme volunteers.
“If the RM5 billion is not taken from KWAN, the government will have to borrow much more and our deficit will likely increase to 6.2% of gross domestic product,” he said.
However, he did not clarify if this meant that KWAN had always been part of the government’s plans to manage the pandemic.
The trust fund currently holds a total of RM19.5 billion as of Dec 31, 2020, comprising RM10.4 billion worth of contributions from Petronas and RM9.1 billion from investment returns.
Tengku Zafrul said the RM5 billion for vaccines will come strictly from KWAN’s investment returns.
Justifying the government’s reasons for tapping into KWAN, he explained that the fund was established 33 years ago to assist the country’s future generation in an emergency.
“We are the future generation it was made for, it was formed in 1988 so we are now the future,” he said.
Tengku Zafrul also noted that the Perikatan Nasional-led administration had inherited over RM1 trillion in liabilities and loans without return payments, including those linked to 1MDB and SRC International Sdn Bhd.
“For example, our 1MDB obligations of RM40 billion would be enough to cover the cost of vaccines eight times over,” he said.
As such, he said the government was facing financial constraints in addressing the current public health crisis.
Tengku Zafrul added that the government was actually allowed to tap into KWAN since 1998, but only for national development purposes.
This was why the amended emergency ordinance was expanded to allow Putrajaya to make use of its funds to specifically procure vaccines and other related expenses.
He also said the government planned to “replenish” the borrowed funds by urging other firms benefitting from natural resources to commit and contribute to the KWAN.
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