MP Gunawardana raises false alarm on borrowing limits

26 September 2019 12:10 am - 2     - {{hitsCtrl.values.hits}}

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In the above statement the MP claims that by passing the Active Liability Management Act the government can: 


01.Obtain foreign loans without    any annual limit.


02.Borrow any amount outside [the provisions of] the budget.

 

According to Active Liability Management Act, the government can refinance or pre-finance public debt through additional borrowing, above and beyond what is explicitly set out in the Appropriation Act (budget). However, the Act sets an annual limit for this borrowing to 10% of the total outstanding debt as at the end of the preceding financial year (section 3). This means that even if all the extra debt raised under this provision is in foreign loans (from external sources), it is subject to this limit. Therefore, the MP is incorrect on 
both claims. 


We classify the MP’s statement as FALSE. 


*FactCheck’s verdict is based on the most recent information that is publicly accessible. As with every fact check, if new information becomes available, FactCheck will revisit the assessment.

 

FactCheck is a platform run by Verité Research. 
For more fact checks, visit our website at
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  Comments - 2

  • Sara Thursday, 26 September 2019 01:14 PM

    What a shame for a former Teacher and education minister.

    roland boniface Thursday, 26 September 2019 05:54 PM

    Bad Show Mr Budget Pack. Then you were wrong still you are wrong. how do you expect people to believe you


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