Don't worry, asset sales accounted for, Rafizi told

The government has not secretly shed state assets to reduce its budget deficit as charged by opposition MP Rafizi Ramli and therefore doesn’t need to call a Parliament session to answer for it.

The Finance Ministry today took PKR director of strategy Rafizi to task for raising alarm over a World Bank report, which it said merely restated facts which were already made known to Parliament in a report submitted on Oct 25.

“The statement made by Pandan MP Rafizi Ramli is irresponsible because it purposefully milked the report for political mileage,” the ministry, under Prime Minister Najib Abdul Razak, said in a statement.

Last week, Rafizi issued a press statement saying that he was“shocked” to learn that the government had ditched the country’s assets in a desperate bid to meet its deficit target. He quoted a page from the World Bank report, 'Malaysia Economic Monitor: December 2013'. The report noted that “...RM7.4 billion originated from non-tax sources, including RM1.4 billion of proceeds from asset sales and RM4.2 billion from the securitisation of government mortgages...”

The ministry statement explained that the asset sales referred mostly to land which were auctioned off for development and has been on-going since 2008.

“The monetisation of government assets is a normal activity carried out by all governments to generate economic activity,” the ministry said. It gave examples of the UK government selling Canary Wharf in London and similar measures also undertaken by Singapore and Hong Kong.

On the issue of sale of government mortgages, the ministry said this was done to create extra capital so that more housing loans could be given out to civil servants. The ministry noted that this comprised less than 2 percent of total government revenue and dismissed it also as a regular banking and finance strategy.

The ministry said that the government had disclosed its gradual plan to reduce its deficit under the 10th Malaysian Plan.

“The government had committed to reduce the fiscal deficit from 5.4 percent in 2010 to 3 percent in 2015 and aimed for a balanced budget by 2020,” it said, adding that this would not depend on pawning state assets but on fiscal consolidation.