Auditor General Malaysia Can T Keep Borrowing Money To Service Debt

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Auditor-General Nik Azman Nik Abdul Majid has warned that borrowing money to service debts can only be a short-term and temporary measure and that Malaysia needs to find a long-term solution to the problem.
"It is true that loans are always made to finance mainly development expenditure.
"Only now, in this year and last year when there was Covid-19 that part of the loan was used to finance the government's fight against the pandemic and to stimulate economic generators to help companies affected by covid," Nik Azman (above) said in a press conference at the Dewan Rakyat today.
When asked how his department would advise the government on the matter, he said borrowing money must not be seen as a long-term solution.
"We understand the situation, but the only thing that we are worried about is that this increase in debt cannot continue.
"This means that it should only be for the short term. The government should take corrective action to probe this debt issue so that it can be controlled and made more manageable, which Public Accounts Committee (PAC) chairperson Wong Kah Woh has drawn attention to.”
PAC chairperson Wong Kah WohNik Azman said that as a result of the increase in debt, interest payments on the national debt have also gone up to such an extent that for every RM1 accrued in revenue, 16 sen are used to pay interest.
"If half of the new debt is used to pay the old debt, this is a situation that cannot be allowed to continue," he said.
National revenue
Earlier, Wong in a statement had also said that the PAC was concerned about the trend of a high percentage of national revenue going towards servicing debt.
"Of the RM62.317 billion allocated to the Development Fund, only RM40.994 billion (65.8 percent) was used for development expenditure purposes, compared to RM37.53 billion (77.3 percent) in 2020.
"A total of RM12.612 billion (20.2 percent) was used to bear PFI (private finance initiative) liabilities and guarantee commitments, and RM8.711 billion (14 percent) was used for the purpose of classifying operating expenses for development.
Wong pointed out that for 2021, 52.4 percent of revenue was used to settle outstanding debts and that 2021 has less development expenditure than 2020.
"In this regard, the PAC continues to commit to playing the check and balance role against the executive's financial and procurement management to ensure that it complies with the procedures and rules set out in the constitutional monarchy democratic system in this country," said Wong.
In the Auditor-General's Report that was presented to Parliament today, it was revealed that the government forked out a total of RM1.7 billion to service 1MDB loan interests last year, including over RM400 million from the country's development allocation.
This was according to the Auditor-General's Report on the Federal Government's financial statement for the year 2021.
"Last year, (the government) paid out RM1.7 billion to service the company's loan interests using RM0.459 billion from the development allocation and another RM1.241 billion from the Assets Recovery Trust Account.
"The trust account balance as of Dec 31, 2021, stood at RM15.281 billion," said the report. - Mkini

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