Dr M Warns Govt Against Getting Into More Debt To Pay Existing Debt

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PARLIAMENT | Dr Mahathir Mohamad (Pejuang-Langkawi) has warned that despite raising the debt ceiling to 65 percent of the country’s GDP, the actual debt amount has remained the same.
He also cautioned the government against taking on more debt to pay off existing debt.
This will end up further burdening future governments and generations for decades to come, Mahathir warned.
In the worst-case scenario, if the government is not able to repay the debt on time, Malaysia will be declared bankrupt, he added.
“It is easy to have a budget that is liked by many. The budget includes additional allocations for everyone.
“The percentage figures of debt can be lowered by raising the debt ceiling, but the amount of debt cannot be reduced.
“Debt must be repaid. If we cannot repay the debt, the country will be declared bankrupt,” Mahathir said while debating Budget 2022 in the Dewan Rakyat today.
Budget 2022 is the biggest in history with an allocation of RM332 billion, but the government’s revenue in 2022 is only RM234 billion, Mahathir pointed out.
“Where will the extra RM98 billion come from? There is a huge possibility that the government will go into debt. Out of the RM332 billion allocation, RM98 will be debts,” he said.
The government is already more than RM1 trillion in debt, Mahathir said, and with this new debt, the amount will become even higher.
There is no need to be proud of the biggest budget in history, he said, as it is only because of the huge amount of debt that the government can fund it.
“And part of the money, which will come from debts, will be used to pay off debts, not only by the current government but also by future governments to come because going into debt to pay off debt does not reduce the amount of debt.
“What will happen is just an exchange of the source of debt,” he said.

Why not pursue misappropriated funds?

Mahathir said he understands the need for the government to spend more due to the Covid-19 pandemic as well as the economic downturn.
But the government does not appear to be interested in pursuing money that has been misappropriated, he said.
He referred to the 1MDB case involving former prime minister Najib Abdul Razak, claiming that “the money stolen by the thief has been returned to the thief” because the government could not prove that the money came from 1MDB.
“But does the thief have clear proof where he obtained so much money? Supposedly a gift from another country’s ruler?” Mahathir said.
Surely there are paper trails that can be tracked to find out where the money came from, he said.
He also said it should not be acceptable for a prime minister to accept so much money from another country’s leader, as this could be seen as an external attempt to influence the country’s politics.
Mahathir then questioned why Najib, who has been found guilty by the court, is not undergoing his sentence.
On the contrary, Najib has been allowed to leave the country, he said.
“If the appeal finds the convicted to be not guilty, then just release them. It has been almost a year since (Najib’s) appeal was made, but there is still no decision made. Justice delayed is justice denied,” Mahathir said.
Privatise costly services
Meanwhile, Mahathir also noted that there are areas where the allocation for Budget 2022 can be reduced, such as in the education, agriculture and telecommunications sectors, through utilising the latest technology or privatisation.
One example, he said, is that the government has privatised the telecommunications sector, but it has since spent billions of ringgit in taking over the latest in telecommunications technology to supply to consumers.
“Why is there a need for the government to be involved in this service? Surely it would be better to leave this to the telecommunications companies which have for so long supplied the communication systems in the country?
“By handing it over to the private sector, the government will save not a small amount in the budget’s allocation. Besides, the government is not well known for its competence in supplying such a service,” he said.
There are many more such allocations in the budget which can be reduced which will, in turn, lighten the country’s debts for the future, Mahathir added. - Mkini

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