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Wednesday, February 29, 2012

National debt: Why the change of mind?


Idris Jala's U-turn on his earlier view that the nation was heading for bankruptcy is 'nothing more than an attempt to mislead people in the run-up to the 13th general election'.
KOTA KINABALU: An opposition MP from Sabah is shocked by the abrupt turnaround by a federal Cabinet minister over the shaky state of the economy of the country.
Tawau MP Chua Soon Bui said Minister in the Prime Minister Department Idris Jala’s recent claim that all is well after earlier declaring that the country could go bankrupt if it did not change its economic policies, appeared to be political finding rather than commonsense.
She said that his claim that Malaysia would no longer face bankruptcy despite the high national debt of RM455.1 billion and a liability of RM96.9 billion, is yet another desperate act by the Barisan Nasional (BN) government to cover up the dreadful financial situation of the country.
Jala stunned the country two years ago when he predicted that Malaysia would be bankrupt by 2019 if the government did not reduce its subsidies and the high national debt.
“The contradictory statement – a U-turn within just two years – amid an increased national debt of RM129.1 billion, is nothing but an attempt to mislead the people on the eve of the 13th general election,” she said.
Chua said people can judge for themselves the excessive spending, mismanagement, corruption, leakages and wastage reported in the Auditor-General’s annual report.
Malaysia has been operating on deficit budgets for the past 13 years, with the national debt reported as RM146 billion in 2002, RM217 billion in 2004, RM242 billion in 2006, RM326 in 2009, RM407.1 billion in 2010 and RM455.1 billion.
Chua, a vice-president of Sabah Progressive Party (SAPP), said that this was worth noting as under the Loan Act 1959 and Government Funding Act 1983, public debt ratio must not exceed 55% of the nation’s Gross Domestic Product (GDP).
“As it is with our national debt of RM455.1 billion, our debt ratio is 54% which is very close to critical point. If you take into account of the contingent liability of RM96.9 billion, our debt ratio is 63%.
“With the national debt increasing more than 10% a year, the debt ratio would reach 100% with a total debt of RM1,000 billion before 2019. Nobody can deny the fact of bankruptcy.
“The present government is zealously lining up a host of new money-squeezing schemes like the Goods Services Tax (GST), the so-called 1Care National Health Scheme and others – all expected to be implemented after the general election, to dig deeper into people’s pockets.
“It is a shame that Jala has now decided to look the other way,” said Chua.

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