The Najib administration is using accounting loopholes to mask the country’s real debt figures, which had actually increased to RM568.9 billion from RM539.9 billion at the end of December 2013, DAP publicity chief Tony Pua said today.
Pua said Prime Minister Datuk Seri Najib Razak did not reveal the truth when he said at the unveiling of Budget 2015 today that his government was meeting the target of slashing its deficit, claiming it had reduced it to 3.5 per cent this year and is expected trim it down further to 3 per cent next year. “This seemingly healthier figure masks the fact that much of the Government-related expenditure today is actually carried out outside the ‘framework’ of the budget.
“This means that the government has found innovative accounting loopholes to continue big-spending and racking up billions of ringgit in additional debt without jeopardising the much-studied figures like the official budget deficit percentage,” he said in a statement. Pua said the real debt figures, which he noted was hidden in this year’s Economic Report, works out to 52.8 per cent of Malaysia’s Gross Domestic Product (GDP), which is just 2 per cent below the official debt ceiling. -
The Petaling Jaya Utara MP also noted that Najib had steadily increased budget allocation for his ministry since taking office in 2009. “While (the debt) figure is itself a concern, what is more worrying is the contingent liability figure which has increased more significantly from RM84.3 billion in 2009 (when Datuk Seri Najib became the Prime Minister) to RM157.5 billion as at December 2013, or an increase of 86.8 per cent over the past five years,” he said.
Pua said the figure is expected to increase further in 2014 and 2015 due to the numerous massive infrastructure projects carried out by state-owned corporations such as the MRT Corp and Syarikat Prasarana Negara Bhd. He noted that in 2013, the federal government guaranteed RM6.5 billion for the MRT construction, an increase of RM4.1 billion from RM2.4 billion in 2012 and this figure is expected to increase much further this year as the on-going first phase of the MRT project is expected to cost in excess of RM22 billion.
Najib had also announced in his budget speech the launching of MRT Phase 2 from Selayang to Putrajaya at the value of RM23 billion. Pua said such allocations, being excluded from the main budget calculations, is masking the increase in the federal government’s contingent liabilities.
“The substantial increase to our contingent liabilities relative to the budget deficit highlights the extent to which our official budget deficit percentage is off-the-mark from the real deficits in our government expenditure.
“The above contingent liability figure is also an under-representation of our real hidden debts because much of these debts, while not explicitly guaranteed by the Federal Government, are implicitly guaranteed,” he said.
Pua added that Najib had also failed to address the concern surrounding 1Malaysia Development Berhad (1MDB)’s growing debt for example, which is in excess of RM36 billion accumulated in over just five years. “It is disappointing that given the seriousness of the persistent deficits and growing Federal Government debt, the Prime Minister has failed to address these critical concerns in his 2015 Budget speech.
1MDB was not even mentioned in the Budget. Pua said the unchecked expenditure via “off-balance-sheet government spending” can have serious negative implications on Malaysia’s financial system. “The impact can certainly be devastating in the event of a negative external shock to our financial systems,” he said. -
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