Budget Office: Finance Ministry didn’t anticipate Covid-19 third wave when drafting 2021 allocations

National Budget Office director Johan Mahmood Merican admitted that the Finance Ministry did not anticipate the third wave of Covid-19 when drafting Budget 2021. — Picture by Yusof Mat Isa
National Budget Office director Johan Mahmood Merican admitted that the Finance Ministry did not anticipate the third wave of Covid-19 when drafting Budget 2021. — Picture by Yusof Mat Isa

KUALA LUMPUR, Nov 27 ― In drafting Budget 2021, the Finance Ministry did not anticipate the third wave of Covid-19, and the reinstatement of the conditional movement control order (CMCO), its National Budget Office director Johan Mahmood Merican admitted today.

However, acknowledging that the situation has changed from recovery stage to CMCO reinstated in several states, he said the ministry is working towards how the country can move out from CMCO or is a more targeted approach can be taken to address the Covid-19 infection spread.

“We are certainly mooting for how we can move out from the CMCO, or if there is a new cluster ― whether the famous Top Glove cluster or the Pavilion construction site ― in fact it should be more of an enhanced MCO or something more effective rather than one that is localised [across the board],” he said during a post-Budget 2021 dialogue organised by the University of Malaya's Malaysian Economic Association.

He also said that the ministry's forecast for the country's 2021 gross domestic product (GDP) growth is set at a range between 6.5 to 7.5 per cent and recovery to continue next year, despite the ongoing uncertainties.

Commenting on the Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz's winding-up speech at Parliament yesterday on increased withdrawal amount for Employees Dividend Fund (EPF), Johan said it was a difficult decision made by the government.

“[The government] had to think about how to accommodate those who either lost jobs or suffered significant loss of income. There is also the argument of what if they don't resume employment or income in the future?” he said.

But as it is under the several stimulus packages, Johan said the government has offered job-search allowances for those who have lost their jobs, enhanced payment programmes extended to nine months for those who are not able to find a job.

Johan also said that the ministry is still studying the possibility of the Budget 2021 not being passed by Dewan Rakyat, pointing to a partial Budget.

He explained that in that situation, the Federal Constitution states in Article 102(A) that if there is not enough time to complete a debate and approval before the year’s end, then the government can table for a partial Budget.

Earlier this month, Tengku Zafrul tabled a mammoth record budget for next year of RM322.5 billion, mainly to address the impact of the Covid-19 pandemic.

Yesterday, the Budget was passed during its policy stage by the Dewan Rakyat.

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