Najib claims Malaysia borrowed RM54.5b from Jan to March 2021, says Parliament should resume to monitor govt’s spending

KUALA LUMPUR, March 31 — Parliament should reconvene despite the current Emergency to enable MPs to monitor the federal government’s spending, former prime minister Datuk Seri Najib Razak said today.

Najib, who is also a former finance minister, claimed that the Malaysian government has made new borrowings totalling RM54.5 billion in just the first three months of 2021 from January to March.

“That’s why it is important for Parliament to resume so that the people’s representatives can monitor the government’s spending.

“The government’s debt is not borne by the government of the day, but by future governments and ultimately will be borne by the citizens through various new taxes,” he said in a statement on his Facebook page.

Earlier in his statement, Najib claimed that the Emergency which was imposed on Malaysia to tackle the effects of the Covid-19 pandemic was now allegedly used to grant powers to the federal government to allegedly “spend as it likes” without following the Budget 2021 and without Parliament’s approval.

Najib cited the government’s use of Emergency powers to gazette a new law today to suspend Section 4(b) of the Government Funding Act 1983 and Section 2(2)(b) of the Treasury Bills (Local) Act 1946 during the Emergency.

“With this, the powers of the Dewan Rakyat related to financial matters have been set aside,” he said of the effect of the suspension of both provisions.

The gazetted new law cited by Najib is the Emergency (Essential Powers) (Amendment) Ordinance 2021, which takes effect from today.

Under this new Emergency ordinance gazetted today, the two provisions under the 1983 and 1946 laws — which relate to procedures for application of monies raised or received by the federal government — will not apply as long as the Emergency is in force.

Under the Government Funding Act which enables the Malaysian government via the finance minister to raise funds in line with Shariah principles, with Section 4(b) relating to the payment of such funds into the federal government’s Development Fund with the prior approval of the Dewan Rakyat via resolutions.

Under the Treasury Bills (Local) Act 1946 which empowers the finance minister to borrow money by issuing Treasury Bills in Malaysia, Section 2(2)(b) provides for the payment of such money raised — with the Dewan Rakyat’s prior approval via resolutions — into the federal government’s Development Fund for the purposes of the Development Fund.

In other words, the usual procedure where the Dewan Rakyat’s approval is needed before funds borrowed by the federal government can be channelled into the federal government’s Development Fund would be suspended during the Emergency.

Also under the same Emergency ordinance gazetted today, the Finance Ministry will temporarily be allowed to approve additional spending of the federal government’s funds beyond the initial Budget without going through the usual route of seeking Parliament’s approval, during the nationwide Emergency in Malaysia.

Under the new ordinance today, the Treasury can approve any supplementary expenditure or withdrawals from the Federal Consolidated Fund — which would require the Dewan Rakyat to pass resolutions and to enact an Act of Parliament on — in a manner provided by any written law or any Treasury Instructions or Treasury Circulars that are in force, despite any provisions in the Federal Constitution on government expenditure from the Federal Consolidated Fund.

Also under the same ordinance gazetted today, the chief minister or mentri besar of the respective states in Malaysia can also make such approvals for extra spending not allocated in the initial state Budget, despite any provisions in the states’ constitution relating to expenditure using a state’s consolidated fund. Such matters would usually require the state legislative assemblies’ approvals.

These temporary financial provisions will apply as long as the Emergency remains in force.

Typically, Parliament’s approval is needed for the federal government’s Budget spending through a Supply Bill that has to be passed in Parliament, while estimates of supplementary expenditure has to be presented before the Dewan Rakyat for approval.

Supplementary expenditure refers to situations when the amount allocated in the approved federal government’s Budget via the Supply Act is insufficient or when the money spent is more than allocated in the Budget or when a need has arisen for spending for a purpose which had not been allocated for in the Budget.

Malaysia has been put under a state of Emergency from January 11 until the expected end date of August 1 unless lifted earlier. During this period, Parliament and state legislative assemblies — which typically play the role of checks and balance on the executive branch of the government — have been suspended until further notice.

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