THE State Legislative Assembly yesterday approved an enactment to repeal the State Heritage Trust Fund Enactment 1996 and to transfer all the properties and monies of the fund to the State Government.
Assistant Finance Minister Datuk Ramlee Marhaban in tabling the bill explained that the main purposes of establishing the trust fund were to enable its board to invest the monies in the fund as deposit in any bank in Malaysia; in the securities market and in money market instruments, including treasury bills, bankers’ acceptances and acceptances of deposits in currencies including the ringgit within a period not exceeding one year.
Ramlee said the State Heritage Trust Fund or in short KWAWNS, had been allocated a sum of RM50 million in 1996 for investment purposes since that was the original purpose of its establishment.
However, due to cash flow and financial constraints at the time, KWAWNS was not able to carry out investment activities as planned until 2012 when KWAWNS was reactivated.
Despite the reactivation of the fund, KWAWNS was hindered from achieving its objectives due to technical issues, he said.
“Taking into account the constraints and technical problems, a decision was taken to propose the closure of KWAWNS while considering other ways to continue the investments as intended,” he said.
He cited that one of the key obstacles faced was the appropriation in the KWAWNS account which could not have a debit balance.
“This means that at the end of every financial year, KWAWNS must have a balance of RM50 million in its accounts. For example, if KWAWNS invested RM30 million, the government had to settle the balance of RM30 million so that the amount in KWAWNS remains at RM50 million,” he said.
Ramlee stressed that this procedure must be adhered to hence making it a burden in terms of the budget adjustment process as well as in the aspect of cash flow.
“Based on the above, it is necessary that the bill on the State Heritage Trust Fund (repeal) 2015 be approved and that for the enactment of the State Heritage Trust Fund 1996 to be abolished, and that further provisions regarding the fund amounting to RM50 million to be put into the State Consolidated Revenue Fund.”
He said the state government was also in the process of identifying a subsidiary company under the Finance Ministry as an alternative vehicle to spearhead the much needed investments which was the original aim of KWAWNS.