Najib’s credentials under scrutiny as national debts skyrocket

Besides fiscal debts of RM456.1 billion, the country has been saddled with RM116.76 billion in contingent liability, spread between loans guaranteed as public debt at RM109.14 billion and off-shore loans at RM7.62 billion.

The figures were provided in the Finance ministry’s parliamentary reply yesterday, and this worries PAS's Kuala Selangor member of parliament who said in the event the RM116.76 billion could not be paid by statutory and corporatised bodies, the Federal government will be further burdened with debt.

"In other words, the Federal government’s debt will exceed 65 percent of gross domestic product (GDP),” he added.

This, according to Dzulkefly, would mean that the government had grossly violated the Loan (Local) Act 1959 and Government Funding Act 1983 which stipulate the maximum limit of 55 per cent to GDP ratio.

He said the RM456.1 billion debt was due to a 100 percent increase over the past five years.

“It was RM146 billion in 2002, RM242 billion in 2006 and now RM456.1 billion at the end of 2011. In five years, the Federal government’s debt has increased by 100 percent,” he remarked.

The main concern of many financial analysts, said the PAS Research Centre head, was the off-balance sheet spending ploy by the government.

He added that the loans taken by statutory bodies and corporatised entities rose to RM116.76 billion in 2011 from RM84.3 billion in 2009. These loans are repaid with public funds should the borrowers default.

“The best example is the controversy in the Auditor General’s Report where loan guarantees were given by Federal government to statutory body Higher Education Fund (PTPTN) at RM17 billion and state-owned public transport company Syarikat Prasarana Negara at RM9.1 billion. Besides that there are also MAS, 1MDB and Sime Darby,” he explained.

As such, Dzulkefly questioned prime minister Najib Razak’s justification in several controversial decisions which have escalated national debt.

Among others, he cited the write-off of RM589 million owed by former MAS chairman Tajudin Ramli to Danaharta despite being ordered to pay by the High Court in 2009, as well as the scrapping of the new civil service salary scheme (SBPA) which would take up an extra RM3.4 billion from the Treasury as it was not allocated under Budget 2012.

Besides that, Dzulkefly also questioned why Najib did not recover the RM976.7 million public fund given to concessionaire Maju Holdings in the controversial sale of Kuala Lumpur-Putrajaya Highway (MEX) to EP Manufacturing Berhad.

“Is this Najib's way as Finance minister to convince the people and tax payers that he is qualified to manage the country’s treasury and wealth? It is clear that he is consistent in siding with cronies and burdening the people. Too bad for the people!” said Dzulkefly.

Deputy Finance minister Awang Adek recently revealed that the country's national debt of RM456.1 billion constituted 53 per cent of the GDP, but argued it was not a source of concern despite being only 2 per cent away from the critical level.

-Harakahdaily