Auditor General worries over borrowings being used to settle debts

 

Auditor General Nik Azman Nik Abdul Majid has expressed worries that 59.9 percent or RM82.723 billion of the federal government New Borrowing Receipts for financial year 2019 was used to settle debts.

He said ideally, the new borrowings should be used for development purposes and to create a multiplier effect in developing the economy.

"Only a small portion which is 29 percent is channeled to the development fund, which is worrying... development expenditure should be used more productively so that the projects the government funds gives higher multiplier effect to generate the economy and at the same time have value for money,” he said.

Speaking at a media conference at Parliament today, Azman said through development projects, the government could collect taxes that could repay the interest and principal of the loans concerned.

According to him, in 2034, the government is projected to repay RM10 billion for that year alone.

"In 2034, we have to pay back RM10 billion, which means a significant increase ... we have to be prepared even though it is still far away. We have to be prepared with economic activities with huge revenue to meet the commitment to repay,” he said.

Commenting further, he said the development allocation for the 2019 financial year among others was used to pay the matured debts of 11 government-owned companies in the form of grants.

The companies involved were:

• DanaInfra Nasional Berhad with an allocation of RM1.5 billion
• Suria Strategic Energy Resources Sdn Bhd (RM1 billion)
• SRC International Sdn Bhd (388 million)
• Jambatan Kedua Sdn Bhd (RM327 million)
• KL International Airport Bhd (RM82 million)
• TRX City Sdn Bhd (RM66 million)
• MKD Kencana Sdn Bhd (RM50 million)

"The two companies with no development projects are Suria Strategic Energy Resources and SRC International but they are using development allocations," he said, adding that the allocation should be channeled in the form of a loan or advance which will have to be repaid.

However, he said the usage of the money is not violating Section 8 of the Loan Guarantee Act 1972 but it did not reflect real accounting ethics in terms of auditing.

Meanwhile, Public Accounts Committee (PAC) chairperson Wong Kah Woh said the committee had heard a briefing by the Auditor General on the 2019 Federal Government Financial Statement tabled in Parliament today.

“At the presentation lasting almost three hours, PAC was comprehensively informed on the overall Federal Government Financial Statement ending Dec 31, 2019, to show the actual and accurate financial position of the federal government with its accounting records updated and orderly maintained,” he said.

- Bernama