KUALA LUMPUR, Oct 30 — More than half of new loans taken by the government during the year are used to roll over its debts, the Dewan Rakyat was told today.
Deputy Finance Minister Datuk Amiruddin Hamzah said from January to September this year, the country’s new debts amounted to RM87.5 billion and RM46.3 billion was used for repayment of long-term debts that had reached maturity.
“In fact, this practice was carried out even before the government changed hands when the debts reached maturity... the government took loans at lower rates to repay the matured debts to get profits out of them,” he said when winding up debate on the mid-term review of the 11th Malaysia Plan for his ministry.
Responding to Datuk Seri Ahmad Maslan (BN-Pontian), who questioned the need for the government to take up loans to repay debts, Amiruddin said it was a common practice by a government to ensure strong cash flow and maintain a fiscal deficit at a predetermined level.
“This occurs under certain circumstances, while ensuring prudent cash flow or new funds coming in... so that they can be used to manage expenses and fund development programmes,” he said.
Amiruddin also pointed out that the debts incurred during the year were those based on the 2018 Budget which were being repaid based on the loan repayment schedule.
Ninety-seven per cent of the government’s debts are made up of domestic loans and the remaining three per cent from foreign loans,” he said, adding that, “We are more confident of domestic loans as the situation is controllable. If the ringgit is attacked, it will not directly affect our ability to pay back.” — Bernama