MALAYSIA’S revenue is expected to fall by around 20-30% as a result of the Covid-19 pandemic, said Finance Minister Tengku Zafrul Tengku Abdul Aziz.

Speaking in the Dewan Rakyat, he also confirmed that government debt had breached the RM1 trillion mark.

“Government income was expected to be RM244 billion in Budget 2020, but this is expected to drop by 20-30% as a result of the Covid-19 pandemic,” he said during his ministry’s winding-up session today.

However, the government, does not expect a twin deficit (financial and current account deficit) as there is sufficient balance in the government’s current account.

“We are expecting between 5.8% and 6% budget deficit as a result of the RM45 billion financial injection for Covid-19.

“However, there will be no twin deficit as the current account position is healthy.

“Furthermore, the law allows us to borrow money to finance our budget,” he added in response to questions from former finance minister Lim Guan Eng on government income and twin deficits.

Earlier today, the government tabled a new law to allow it to undertake temporary measures relating to government financing, including raising the debt ceiling from 55% to 60%.

However, Tengku Zafrul did not elaborate on how the government planned to overcome the income shortage.

He said government debt was almost RM1.4 trillion.

“In the first quarter of 2020, government borrowings were RM823 billion.

“If you add the government guarantees for contracts of RM166 billion and other borrowings of RM166 billion, our total debt today is RM1.264 trillion.”

The actual level of government debt had been a source of contention between Barisan Nasional and Pakatan Harapan.

BN always contended that government borrowings were below RM1 trillion, while PH said they were higher because of the government guarantees for contracts.

Zafrul’s 45-minute winding-up session was disrupted with interjections and ended abruptly as backbencher and opposition MPs clashed over old issues, such as whether the BN government had “stolen” revenue collected from goods and services tax before PH took over in 2018.

The session, which ended just before 7pm, was brought to a halt by Speaker Azhar Azizan Harun, as opposition MPs protested that Tengku Zafrul had left their questions unanswered. – August 6, 2020.