PETALING JAYA: The government may have an uphill task bringing the country’s economy back on track due to the Covid-19 pandemic.
Former domestic trade and consumer afairs minister Datuk Seri Saifuddin Nasution said the previous Pakatan Harapan administration had based the country’s 2020 Budget on the crude oil price of US$62 (RM269) per barrel.
However, he noted that the global virus outbreak has caused oil price to plummet by half to around US$30 (RM130) per barrel.
He said this, coupled with the expected tax collection when the budget was announced in October, meant the government’s revenue could be far below than initially predicted.
“Based on the oil price alone, we could lose about RM10 billion in potential revenue. This does not include incomes from other sectors.
“Based on my experience as a minister, I would say the government’s financial situation is very complicated,” he told a press conference that was streamed on Facebook yesterday.
Saifuddin was asked to comment if he believed the government has the financial strength to provide RM600 for up to six months to any Malaysian forced to go on unpaid leave due to Covid-19, as announced by Prime Minister Tan Sri Muhyiddin Yassin.
The PKR secretary-general said the financial assistance would only make up a small portion of the government’s spending, reminding the current Perikatan Nasional administration that it still has debt commitments.
“If they don’t pay according to schedule, it will affect our country’s position from various ratings agencies.
“We may still be able to take up loans in the future, but then we will have to pay a higher interest rate,” he said.
