MoF: No supplementary budget needed

By AFIQ AZIZ / Pic By TMR

The government is not expected to request for any supplementary budget this year to mitigate the national debt and deficit, as presumed by research institutions and economists.

Deputy Finance Minister Datuk Amiruddin Hamzah (picture) said the government has put in all the necessary measures to safeguard the country’s financial situation.

“We are controlling everything within our fiscal policy, such as the expenditure, and at the same time trying to get more income.

“If we can manage to control that, there is no need for us to work (on) the supplementary budget,” he told reporters at the announcement of the MyCreative Ventures Sdn Bhd awards in Putrajaya yesterday.

Several newspapers recently reported that Prime Minister Tun Dr Mahathir Mohamad had “hinted” on tabling a supplementary budget.

The move was supported by analysts and economists, amid a huge government debt that amounted to some RM1 trillion, as well as other billions in arrears held by 1Malaysia Development Bhd, along with the RM19.24 billion in unpaid Goods and Services Tax (GST) claims.

The Pakatan Harapan government’s introduction of the zero-rated GST initiative from June 1 — before replacing it with the Sales and Services Tax on Sept 1 — has also resulted in a total of RM11 billion being passed on to the people, causing a shortage in revenue.

Putra Business School senior lecturer Dr Ahmed Razman Abdul Latiff said in a newspaper report that the supplementary budget — an additional amount that could be requested by the government from the Treasury — is a common practice in the country for years.

He suggested that the government might find the need to absorb the huge amount of outstanding debt, including its accumulated interest.

The last supplementary bill was tabled by former Second Finance Minister Datuk Seri Johari Abdul Ghani in March, requesting for an additional RM7.12 billion.

Amiruddin said the government will continue to engage the public and other stakeholders on the necessities to adjust any financial mechanism, including formulating new taxes, if needed.

“What is important is we want to keep our fiscal deficit within a manageable amount while we spend to stimulate the economy to expand.

“At the same time, we must ensure we manage our debt, so that we can afford the repayment,” he added. The government aims to achieve a fiscal deficit at 2.8% of gross domestic product this year.

On another issue, Amiruddin said sovereign wealth fund Khazanah Malaysia Bhd will continue to be governed by the Ministry of Finance (Inc) Act 1957, despite no representatives from the Ministry of Finance (MoF) were elected as part of its board of directors last month.

“It stays until any new direction to remove it from the Act is decided,” he said.

On July 30, Dr Mahathir was appointed as Khazanah’s new chairman, along with Economic Affairs Minister Datuk Seri Mohamed Azmin Ali, former Petroliam Nasional Bhd president Tan Sri Mohd Hassan Marican, former Bank Negara Malaysia deputy governor Dr Sukhdave Singh and former Securities Commission Malaysia ED Goh Ching Yin as its directors.

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