By Amar Shah Mohsen
SHAH ALAM, Nov 11 — The Covid-19 pandemic and subsequent major flooding in 2021 served as a lesson to the Selangor government on the importance of ensuring sufficient reserves, said Menteri Besar Dato’ Seri Amirudin Shari.
He said it was thanks to the healthy reserves that various initiatives could be introduced and aid distributed to affected individuals during these crises.
Amirudin’s comment was in response to Opposition pressure for the Selangor government to spend more on people-centric initiatives, citing its huge reserves.
Addressing the State Legislative Assembly today, he said the entire state reserves would have been depleted by the end of this year had the Selangor government continued with the imprudent approach adopted by his predecessor and now Opposition leader, Datuk Seri Mohamed Azmin Ali.
“Based on our experiences handling the Covid-19 pandemic and major floods in 2021, we still need substantial reserves.
“Take the Selangor Heritage Fund, for example, one of our biggest consolidated funds. We have up to RM700 million in savings. During the twin crises, we (were able to) use part of it, in line with the trust deed,” Amirudin said in his wind-up speech for the 2024 Selangor Budget.
Under ordinary circumstances, it would only be financially prudent to utilise the heritage fund when it accumulates over RM1 billion in savings, effectively meaning higher interest payouts.
The state reserves are also necessary to ensure wage obligation for civil servants, as well as payments for premiums, taxes, and other fees for the first three months of each year can be fulfilled, pending allocation from the annual budget.
The Menteri Besar added that Selangor still has millions of ringgit in payments due in 2026 under the Selangor Children’s Heritage Fund (Tawas) programme, which has since been discontinued and replaced by the Iltizam Anak Selangor initiative.
“We must fulfil our obligations under Tawas, per the agreed terms. We have to spend over RM36 million in 2026 to settle the promised payments of RM1,500 for each registration under Tawas,” he said.
This is also why Amirudin decided to scrap the initiative, which was introduced under the previous state administration, which he described as financially unsustainable due to the lack of investment elements and potential income to support the programme.
“We can use (our reserves) if there is a substantial surplus, and we have shown in the past that we have done this. But if we continue with the (spending) trend like in 2018, our coffers will be empty by the end of 2023,” he said.
In August last year, Amirudin said Selangor recorded RM3.4 billion in total reserves, its highest since 2008.