PSC confirms overall national debt, liabilities at RM1.1t

The figure includes RM741b in federal debt, RM132.7b in govt-guaranteed loans, RM32.2b of 1MDB principal debt and RM184.9b in other liabilities

pic by TMR File

THE Parliamentary Select Committee (PSC) yesterday confirmed that the overall national debt and liabilities stood at RM1.1 trillion or 75.4% of GDP on an accrual basis.

PSC chairman Datuk Seri Mustapa Mohamed (picture) said the figure comprised RM741 billion in federal debt, RM132.7 billion worth of government-guaranteed loans, RM32.2 billion of 1Malaysia Development Bhd’s (1MDB) principal debt and RM184.9 billion in other liabilities.

The inclusion of repayment obligations — which is in line with reporting standards set out by the International Monetary Fund — gave a more accurate indication of the country’s finances, Mustapa said.

“We (members of the PSC) have all agreed to this amount. This is another step forward for the country’s Parliament, a mature democracy, where we can now debate on the matter objectively based on facts,” he said in a news conference at the Parliament yesterday.

Apart from Mustapa, other PSC members include Nik Nazmi Nik Ahmad (Pakatan Harapan or PH-Setiawangsa), Datin Dr Tan Yee Kew (PH-Wangsa Maju), Dr Kelvin Yii (PH-Bandar Kuching), Khoo Poay Tiong (PH-Kota Melaka), Khairy Jamaluddin (Barisan Nasional-Rembau) and Datuk Alexander Nanta Linggi (Gabungan Parti Sarawak-Kapit).

Among the recommendations made by the PSC are the incorporation of off-budget items into the budget, the enactment of laws on the maximum amount of government guarantees that it can undertake, and comparisons of the federal debt level against countries in Asean and other developed nations.

The actual amount of debt accrued by the government has been a point of contention since PH came into power, as members from the previous administration, including former Prime Minister Datuk Seri Mohd Najib Razak, claim the figure to be lower.

Mustapa, a former Umno strongman who joined the ruling coalition in October last year, said the difference in opinion was due to changes in reporting standards from cash-based accounting to accrual accounting. The migration process began in 2015 and is set for completion in two years.

Accrual accounting takes into account total assets and liabilities, including future liabilities, while cash-based accounting only looks at transactions.

On a separate note, Khairy highlighted an increase in federal debt from RM686.8 billion in 2017 to RM741 billion in 2018. At the same time, he said government revenue has declined which he attributed to the abolishment of the Goods and Services Tax.

“It shows that the government’s attempt to lower the debt level has not worked so far. As much as we (the Opposition) acknowledge that the overall debt is at RM1.1 trillion, it must also be recognised that federal debt had risen to nearly RM800 billion. Hopefully, the government will take heed and prevent it from rising further,” Khairy said.