Former finance minister Lim Guan Eng has condemned the government and his successor Datuk Seri Tengku Zafrul Abdul Aziz’s reasoning behind their decision to dip into the National Trust Fund (KWAN) to procure Covid-19 vaccines.
The DAP secretary-general dismissed Tengku Zafrul’s claim that KWAN fund is being used for its actual purpose, which should be for the benefit of the future generations, unlike the vaccines.
Lim said the government should have instead borrowed the required funds from domestic loan sources for the procurement of the vaccines, then accusing the Perikatan Nasional (PN) government of misusing their powers conferred under the Emergency Ordinances to utilise such funds without necessary oversight.
He pointed out that unlike how Tengku Zafrul had mentioned, government debts and commitments amounting to more than RM1 trillion coming as a consequence of the 1Malaysia Development Berhad (1MDB) scandal cannot be used as an excuse to dip their hands into KWAN’s funds.
“However, this RM1 trillion debt, exacerbated by massive financial scandals such as 1MDB, cannot be the pretext for the Finance Ministry to divert RM5 billion from KWAN to cover its Covid-19 vaccination programme.
“The government can easily borrow that RM5 billion from the RM1.3 trillion domestic debt market at a most opportune time of historically low-interest rate regime.
“The PN government is misusing its emergency powers to amend the laws to allow KWAN to be used for the Covid-19 vaccination programme, and not just for national development purposes,” he said.
The Bagan MP then questioned the government’s apparent hesitance at taking on new loans specifically for the procurement of vaccines, asking if there was anything being concealed that might hinder loan applications.
“Buying vaccines is not an investment in our children’s future, it is to save lives, which can be covered by borrowings.
“The refusal of the PN government to borrow when Malaysia has both the capacity and capability to do so raises suspicion whether there is something to hide,” he wrote in a statement today.
Lim said the PN government moving such a large amount of funds out of KWAN without having to go through the scrutiny of Parliament will only deter the view of potential investors.
He then pointed out how borrowing the cash, an option he claimed the government appears to be avoiding, would subject the loans to governance, oversight and transparency over how it is utilised.
“Borrowing would require the necessary due diligence and rigorous compliance with lending protocols of transparency, especially how the funds are to be utilised.
“In contrast, there is no necessity for any financial accountability when the government dips into KWAN. Only MPs can demand answers in Parliament as to how the RM5 billion taken from KWAN is spent.
“PN has conveniently suspended Parliament, blocking off any parliamentary oversight and government scrutiny. Such opaque administration of public finances will create a larger trust deficit that will jeopardise both investor and public confidences,” he said.
Lim pointed out the recent issuance of Sustainability Sukuks worth more than US$800 million (RM3.3 billion) as more reasons that would otherwise aid the government in acquiring sufficient loans to avoid dipping in KWAN.
Additionally, Lim also demanded the government come clean on how the RM17 billion Covid-19 fund approved by Parliament last year has been spent, and whether all of it has been exhausted just four months into the new year and if that is the main reason why KWAN’s funds are being tapped into.
“Is the Finance Ministry telling Malaysians that in the space of less than four months, RM17 billion has been fully used up? In the interests of transparency and accountability, the Finance Ministry must come clean and give a full accounting of how the RM17 billion was spent.
“Even if the RM17 billion has been fully spent in less than four months, there is no justification to ‘raid’ and dip into KWAN when the government still has the capability and capacity to borrow,” he added.
Yesterday, Tengku Zafrul looked to justify the recent decision by Putrajaya to utilise KWAN’s funds to procure vaccines, saying this was the correct time to use such reserves, and if not now, when.
The Finance Minister had also singled out issues like 1MDB’s outstanding RM40 billion debt as an example of legacy debt obligations the government has to honour, and of fiscal limitations faced by them that limits borrowing.
Tengku Zafrul had also mentioned how RM42 million of funds from KWAN has been previously utilised for the preservation of the Paya Indah Wetland in Putrajaya, opposing criticism that claimed funds were left untouched even during the 1998 and 2008 financial crises.