Government Financing for Covid-19 Bill 2020
10 August 2020
- increasing the ceiling of the total sums that may be raised under section 3(1) the Loan (Local) Act 1959 and the total amount that may be received under section 3(1) of the Government Funding Act 19831 from 55% to 60% of the country’s Gross Domestic Product, as confirmed by the Minister of Finance; and
- establishing a COVID-19 Fund (the ‘Fund’) which is to be applied and appropriated for the purposes of the programmes under the economic stimulus packages and the economic recovery plans specified in the First Schedule to the Proposed Act (e.g. the wage subsidy programme, Bantuan Prihatin Nasional and the various measures under Penjana).2
The Proposed Act also seeks to validate sums paid into, and applied and appropriated from, the Fund from 27 February 2020 until the date on which the Proposed Act has passed into law and is gazetted.
Upon being passed into law, the Proposed Act is deemed to have come into operation on 27 February 2020 and shall continue in force until 31 December 2022, whereupon –
- any money payable from the Fund shall be paid within six months from the expiry date; and
- after the payments referred to in paragraph (a) above have been made, any balance of moneys in the Fund shall, be paid into the Development Fund specified in the Second Schedule to the Financial Procedure Act 1957.
Comments
The Proposed Act deals solely with the financing of the various measures introduced by the Government to mitigate the impact of the outbreak of the COVID-19 pandemic in Malaysia.
It remains to be seen whether another Bill will be tabled before Parliament to address other matters that arise from the outbreak of the COVID-19 pandemic, such as the introduction of statutory force majeure provisions and the granting of a moratorium on insolvency proceedings against individuals.
1 These limits are set out in the Loan (Local)(Statutory Ceiling for Borrowing) and Government Funding (Statutory Ceiling of Moneys Received) Order 2009.
2 The Minister of Finance is given the discretion to direct that the surplus amount of any sum appropriated for a programme be appropriated in aid of any other programme where the sum appropriated for the latter is deficient.