Politicians shocked that PN govt resorted to tap into trust fund

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Putrajaya being irresponsible by using KWAN money for vaccines when it had already allocated RM3 billion under the 2021 budget and an additional RM2 billion in March.

The government’s decision to pass an emergency ordinance allowing it to tap into the National Trust Fund (KWAN) for vaccine expenses has stirred up a hornet’s nest, with many questioning the need for such a move.

A day after former prime minister Datuk Seri Najib Razak questioned the need to tap into KWAN, several others have joined the chorus of criticism.

Najib pointed out that Putrajaya had previously said the RM3 billion was sufficient to vaccinate 83% of Malaysians and there was no reason to seek more funds.

Muhammed Abdul Khalid, who was former prime minister Tun Dr Mahathir Mohamad’s economic adviser, said today he was shocked that the Perikatan Nasional-led government had resorted to tap into KWAN when it could easily raise funds from other sources.

“KWAN is similar to Norway’s oil fund, which is meant for future generations. Even in times of crises, such as the 1998 Asian Financial Crisis or the 2008 Global Financial Crisis, the government did not touch the fund.”

He said Putrajaya was being irresponsible by using KWAN money for vaccines when it had already allocated RM3 billion under the 2021 budget and an additional RM2 billion in March.

“The public has a right to know why the government needs even more money for vaccines and how much will be taken from KWAN,” he said

Former finance minister Lim Guan Eng said Putrajaya should take advantage of low interest rates and borrow funds instead of tapping the KWAN.

“This is particularly so when government borrowing rates in recent months have been the cheapest in history,” the DAP secretary-general said in a statement.

“(It) is a better way to fund our vaccine procurement. Instead of raiding KWAN, the government should borrow money and raise its deficit level.”

He said under Budget 2021, the government had allocated RM2.05 billion for vaccine purchases to cover 26.5 million people or slightly more than 80% of the population.

“If the government truly needs more money to buy vaccines, the sum could easily be raised in the market cheaply with little impact on the deficit ratio.”

KWAN, which is governed by the National Trust Fund Act 1988, is managed by Bank Negara Malaysia.

It was established in 1988 to conserve the nation’s wealth from petroleum and other natural resources for future generations, which includes contributions from Petronas.

According to the 2019 Auditor-General’s Report, there was RM16.03 billion in the fund as at December 31, 2019.

Yesterday, the government gazetted an Emergency Ordinance allowing it to use funds from the NTF for the “procurement of vaccines and any expenditure incurred in relation to the vaccines for an epidemic of any infectious disease as specified under the Prevention and Control of Infectious Diseases Act 1988 (Act 342)”.

The ordinance, named the Emergency (National Trust Fund) (Amendment) Ordinance 2021, adds a new subsection to Section 6 of the National Trust Fund Act 1988.

DAP’s Klang MP Charles Santiago also questioned the government’s move to use KWAN to finance the procurement of Covid-19 vaccines and vaccine-related expenditure, asking the government to explain why funds allocated in the Budget 2021 were not enough.

In a Facebook post today, Charles also asked Prime Minister Tan Sri Muhyiddin Yassin to be “open, accountable and transparent” in disclosing how the RM3 billion vaccine-related funds from Budget 2021 were used, and to allow for public scrutiny on the matter.

“The use of the National Trust Fund would compromise investments and push foreign investors to have little faith and confidence in the way we manage finances,” said Charles.

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“It raises concern that the government could arbitrarily use up the RM16 billion available in the fund before the emergency ends.”

Santiago also brought up the matter of reconvening Parliament and asked the government to table a supplementary Budget so that the additional funds taken from government coffers will go through parliamentary oversight.

Kuching MP Dr Kelvin Yii, meanwhile, urged the government to reconvene Parliament and allow the parliamentary select committees to function to ensure there is transparency over the plans to tap into KWAN.