In Parliament, Najib suggests motion to raise 55pc statutory debt limit to improve Malaysia’s Covid-19-hit economy

·3-min read
Datuk Seri Najib Razak arrives at the Kuala Lumpur High Court July 16, 2020. — Picture by Yusof Mat Isa
Datuk Seri Najib Razak arrives at the Kuala Lumpur High Court July 16, 2020. — Picture by Yusof Mat Isa

KUALA LUMPUR, July 16 — Datuk Seri Najib Razak (Pekan-PN) has suggested a parliamentary motion to raise the 55 per cent statutory debt limit.

He added that this would allow the Malaysian economy to recover from the impact of the Covid-19 pandemic.

He said although the national assets as confirmed by former prime minister Tun Dr Mahathir Mohamad last February amounted to RM1.2 trillion, any sale would not be prudent at this time as the market price would be low.

“Although the national assets are substantial, this Covid-19 period is not the right time to sell national assets because of market prices.

“Therefore, I would like to recommend the government submit an immediate motion to raise the Statutory Debt Limit of 55 per cent to a higher level.

“The Perikatan Nasional government needs to have greater ‘fiscal space’ to fight the economic impact of Covid-19 without having to sell national assets at a time of low asset value,” he told Parliament in his King’s speech debate today.

In June, Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz said the country’s debt level could hit the statutory limit of 55 per cent of gross domestic product at the end of the year from 52 per cent currently following the implementation of measures to save lives, protect livelihoods and stimulate the economy.

Najib also wants the government and Bank Negara Malaysia to ensure that banks review the decision not to extend the moratorium period for borrowers.

He said that many companies and bank borrowers will not be able to continue with their monthly instalments when the moratorium expires and will have to be declared bankrupt.

“If the bank is unable to extend the moratorium on instalment payments for both principal and interest loans, consider giving a period in which the borrower only has to pay monthly instalments for the interest portion only and does not involve the principal amount.

“In this case, the government needs to be more assertive and not subject to the wishes of the banks alone. 

“So, this is the time for banks to make sacrifices so that their customers are not affected and still can return billions in profits to banks in the future when the Covid-19 crisis ends,” he said.

Najib also reminded banks that the main reason they want all loans repaid is so that they have the funds to provide new loans to new customers.

“On the other hand, if the demand for new loans has also plummeted, then there is no need for banks to force their customers to repay the principal or principal of the loan,” he said.

Najib was able to deliver his speech at Parliament today as High Court judge Collin Lawrence Sequerah decided to power through lunch time to hear his money-laundering and power abuse trial over 1Malaysia Development Berhad (1MDB) funds in order to end proceedings earlier today, after having received a letter from Dewan Rakyat speaker Datuk Azhar Azizan Harun.

However, he warned Najib’s lawyer to give advance notice next time.

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