BUDGET 2019 | The RM7.4 billion samurai bonds received by the government will be used to retire some of the costly loans taken by the previous government, said Prime Minister Prime Minister Dr Mahathir Mohamad.

Speaking to reporters after the tabling of the 2019 Budget here today, he said at a 0.65 percent interest rate, the number was a very considerable reduction.

“The previous government borrowed money at the rate of six percent, but instead of getting 100 percent of the money borrowed, we got only 90 percent.

“So, the interest is on 100 percent, when the rate has gone up to seven percent. Now between seven percent and 0.65 per cent, I think you realise this is a very considerable reduction,” he said.

The government has extended its appreciation to the Japanese government for the offer to guarantee ¥200 billion (RM7.4 billion) in publishing samurai bonds over a 10-year period.

When tabling the budget in Parliament today, Finance Minister Lim Guan Eng said this was due to the confidence in the administration and leadership of Mahathir.

“The samurai bonds will be guaranteed by the Japan Bank of International Cooperation, at a coupon rate of 0.65 percent, and is expected to be published before March next year,” he said when tabling the budget.

Mahathir said although the deficit number is expected to be at 3.7 percent this year, the government has put in place measures to correct the impact on that deficit.

“We were very careful about how the money is going to be spent. Although the budget is more than the previous year, you must remember that we also carry the burden of having to repay our debts which were incurred by the previous government,” he added.

Heritage hub

Asked to comment on Petronas’ RM30 billion special dividend, he said although the national oil company needs money to carry on with its explorations and production, it could still afford the amount.

The price of oil, Mahathir noted, had gone up quite high and is now trading at almost US$80 per barrel.

Meanwhile, on Khazanah Nasional Bhd’s plan to restore and redevelop the Sultan Abdul Samad building in Kuala Lumpur as a cultural and heritage hub, the prime minister said the project is special.

He also said the government would try and fulfil the aspirations of the people and at the same time did not want expenditure to exceed income in the budget.

“We do not have loans to set up a new company so that we can steal money. We are borrowing to reduce the interest rate on loans. We are very careful in spending only what we have and if we do not have the money, we will not spend,” he added.

As for the Tabung Harapan, Mahathir said it would be used to settle the government’s financial problems.

“We will use the money as wisely as possible,“ he added.

Asked if the government aims to balance its financial book and if there is a time frame for it, Mahathir quipped: “Well, we want to balance the book, but sometimes the book cannot be balanced.” - Bernama