Should government tap into future reserves to buy Covid-19 vaccines?

The government has amended the National Trust Fund Act 1988 to enable Putrajaya to tap into reserves as the fight against the Covid-19 pandemic intensifies.

There has been mixed response.

Some claim it’s justified given the situation. Others wondered what had happened to the RM5 billion allocated under the National Covid-19 Immunisation Programme and why more funds are needed now.

Twentytwo13 dwells into the issue.

What is the National Trust Fund?

The National Trust Fund was set up in 1988. Managed by Bank Negara Malaysia, the fund is for future generations.

It is similar to the Government Pension Fund in Norway. Such funds are common in oil-producing nations as most of the proceeds from oil go into such a fund.

The Norway fund is the world’s largest sovereign wealth fund with a market value of about NOK11.3 trillion (RM5.49 trillion).

As of 2017, the National Trust Fund has RM16.9 billion in assets, with Petronas its main contributor.

What was amended in the National Trust Fund Act?

Under Section 6 – Application of moneys of the Fund – the government has introduced a new subsection that now allows the trust funds to be used for “the procurement of vaccines and any expenditure incurred concerning the vaccines for an epidemic of any infectious disease as specified under the Prevention and Control of Infectious Diseases Act 1988.”

What happened to the allocation for the national immunisation programme?

Under Budget 2021, the government allocated RM3 billion to purchase and distribute Covid-19 vaccines.

Science, Technology and Innovation Minister Khairy Jamaluddin in December said RM2.05 billion from the RM3 billion was used to buy Covid-19 vaccines for 26.5 million people in the country.

He said the balance would be reserved as a buffer for any future purchases.

Last month, Prime Minister Tan Sri Muhyiddin Yassin announced the government would increase the allocation for immunisation programs from RM3 billion to RM5 billion.

The government has not released the exact amount paid for the various brands of vaccines being used in the national immunisation programme.

Is the move to tap into the National Trust Fund acceptable?

Asian Strategy and Leadership Institute’s (Asli) Centre for Public Policy Studies chairman Tan Sri Ramon Navaratnam said broadening the scope of the trust fund to include the purchase of vaccines is welcomed as long as it “benefits the people”.

“But we need to ensure there is integrity and the funds use is properly managed,” Navaratnam, an economist, said.

“There were claims we were overpaying for vaccines and this would be the right time for the government to announce how much it was paying to prevent any leakage.”

Navaratnam added the entire exercise involves the issue of public faith and financial management.

“As such, transparency is paramount,” he added.

Klang MP Charles Santiago said the move raises concern the government could arbitrarily finish money in the National Trust Fund before the emergency ends.

“The government must explain why the Budget 2021 allocation isn’t sufficient for the purchase, storage and distribution of Covid-19 vaccines,” said Santiago.

“Muhyiddin must be open, accountable and transparent in the way funds were used, and allow for public scrutiny.”

Would foreign investors be spooked?

Santiago believes so. He said: “The use of the National Trust Fund would compromise investments and push foreign investors to have little faith and confidence in the way we manage finances.”

However, financial experts say the world is flushed with liquidity and investors are still eager to place their money in Asia.

The government announced yesterday it had approved the National Investment Aspirations. It would serve as a framework that would outline the basis for Malaysia’s investment policy reforms and help revitalise the country’s investment climate and create high-income jobs.

Here’s the round-up of The News Normal today.

KING GRANTS AUDIENCE TO OPPOSITION COMMITTEE SEEKING END TO EMERGENCY

Yang di-Pertuan Agong, Al-Sultan Abdullah Ri’ayatuddin Al-Mustafa Billah Shah, has granted an audience to the opposition’s Tamat Darurat committee which is seeking an end to the emergency.

Committee chairman Khalid Samad, who is Shah Alam MP, said the committee received a letter from Istana Negara today, but a date for the audience has not been set.

On Monday, several opposition leaders including former Prime Minister Tun Dr Mahathir Mohamad, Amanah president and Kota Raja MP Mohamad Sabu, Lembah Pantai MP Fahmi Fadzil, Segambut MP Hannah Yeoh, Seputeh MP Teresa Kok and Kepong MP Lim Lip Eng went to the palace to hand over a memorandum requesting an audience with the King.

The leaders said they were seeking an audience to inform the King of the negative impacts of the emergency and why it should end.

AEROSPACE INDUSTRY EXPECTED TO REBOUND NEXT YEAR, SAYS AZMIN

International Trade and Industry Minister, Datuk Seri Mohamed Azmin Ali, said the aerospace industry is set to rebound early next year.

He said the recovery is achievable if Malaysia continues to capture new work packages with a positive impact on the entire ecosystem via product localisation.

Delivering his address at the Airbus Malaysia Connect Webinar, he said the recovery would be expedited if the industry can expand its cargo services, business aviation, maintenance, repair and overhaul and professional training services.

TUN ARIFIN ZAKARIA APPOINTED CHAIRMAN OF AIAC ADVISORY COUNCIL

Former Chief Justice Tun Arifin Zakaria has been appointed chairman of the Asian International Arbitration Centre’s (AIAC) Advisory Council.

His two-year term is effective April 1.

RESTORING, MAKING EARTH GREENER BEGINS NOW

In conjunction with Earth Day today, Twentytwo13 spoke to two Malaysian environmentalists – Treat Every Environment Special director Leela Panikkar and Malaysian Nature Society Selangor branch chair Pasupathy Jayaraj – to learn what our nation of 32 million people can do to protect nature and be advocates of conservation.