Cut emotional tirade on national debt, clarify using accounting standards

 

From Walter Sandosam

Given the upcoming Johor state elections and political rhetoric, the electorate is again exposed to various takes on certain issues.

This includes the well-worn articulations on the size of the national debt which, depending on the viewpoint expressed, serve only to put a spin on the issues and confuse the public. These are largely to serve political purposes.

Calculations of the national debt are based on certain set criteria. World bodies have decided what to include and what not to. These criteria have been adopted globally to ensure comparability.

A political figure had poured scorn on the purported increase in national debt, from close to RM687 billion to over RM1 trillion, “under the Pakatan Harapan government”.

This had elicited an emotionally caustic response that went overboard, claiming “hidden debt” in terms of government guarantees and “off balance sheet” items.

The rational way to elucidate or provide clarity on the issue is simple. Is the figure of RM1 trillion calculated based on the same criteria as the RM687 billion? Only then is one able to compare.

If the same criteria were used and they meet the stipulations of the International Monetary Fund (IMF) or World Bank on the calculation of the national debt, then there is merit to the claims of an increase. If not, it is just disinformation.

So, all one has to do to prove the statement wrong is to show what the actual figure is. This logically should be based on the criteria used for the RM687 billion figure. It will serve to prove that the figure of RM1 trillion is grossly inaccurate and a possible political spin.

The 1MDB issue has to be taken into context. It was a well-orchestrated fraud of epic proportions facilitated by banks with global brand names and international personalities. It was exploited to the hilt by parties with the sole aim to walk the corridors of power.

Tirades on incompetency and peripherals on the RM80 billion spent on the MRT only serve to cloud the issue.

After all, the MRT has served to meet transportation woes and also has a multiplier effect on the economy. Whether it was brought to Parliament or not is a process issue.

The revenue gained from taxes and other administrative dues is how the government generates the money to pay off the national debt.

By and large, “social projects” like the MRT and highways are expected to be “funded” by the government as the payback period is too long for the corporate sector.

On overpriced projects, again there must be comparability. It was announced that certain parts of MRT’s newer phases and the East Coast Rail Link (ECRL) project were reduced in price only to be revealed later that the specifications had been changed.

To gain political points, this was spun into a tale of “cost savings” when it was far from the truth as, obviously, lower specifications translate into lower costs.

The average voter is now better informed after being taken for a ride by promises which could not be translated into action.

Clear, quantitative figures based on acceptable accounting or scientific standards is what the electorate wants to hear to debunk statements that may lack merit.

Emotional tirades do not serve any purpose except to turn off the person hearing them. - FMT

Walter Sandosam is a former MACC oversight panel member and is also a past president of The Institute of Internal Auditors Malaysia.

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.