KUALA LUMPUR, May 26 — The federal government would have been able to spend more to provide Covid-19 financial assistance for its citizens had it not been for the outstanding sovereign debts such as those owed by 1Malaysia Development Berhad (1MDB) and SRC International Sdn Bhd.
In a five-minute video posted on his official Facebook page today, Finance Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz said at least 15 per cent of the current government’s debt was due to its obligations to service 1MDB’s guarantees and debts.
He said projects like 1MDB and SRC International were not generating any sort of revenue whatsoever to service their principal loan and accumulated interests which the current government has inherited from.
“Touching on government debts, we cannot run away from 1MDB and SRC.
“We were told to move on but when it comes to discussing debts, it is important for the people to know where the government money has gone to that are meant for helping them especially during the Covid-19 pandemic.
“Just imagine how many people we could have helped with this amount,” he said.
The video was in response to a May 22 Facebook post by Najib who accused the Perikatan Nasional administration of misusing its power under the Emergency Ordinance to seek billions in government borrowings to spend, yet delaying the implementation of much-needed financial aid for the people and stimulate the economy.
Tengku Zafrul said the government borrowings as of April 2021 stood at RM81.8 billion.
He said RM31.6 billion is to service such legacy debts and RM50.2 billion is reserved for spending on development, which includes expenditures under the Covid-19 fund.
Both 1MDB and SRC International had remaining debt obligations amounting to some RM42.3 billion, he said.
He stressed that the government has always been transparent in all relevant data concerning the fiscal position and country’s debts which are publicly available on the Finance Ministry and Bank Negara Malaysia website.
“Today’s government does not play ‘magic tricks’ in the matters of government borrowing or spending,” he said, adding that all the government’s financial statements are audited annually.
He also said federal government debt had increased by more than 120 per cent between 2008 and 2017, on top of an exponential increase in government guarantees by 240 per cent the same period.
“What is more saddening is that we do not know what are the benefits of these borrowings,” he added.
Tengku Zafrul clarified that the government’s current borrowing is not RM115.53 billion as claimed by Najib, but is RM81.8 billion, with all government borrowings since January 1 based on expenditures passed in Parliament last year during the tabling of Budget 2021.
He explained that the difference in both amounts was due to Najib’s inclusion of borrowings made by Petroliam Nasional Berhad and Khazanah Nasional Berhad as borrowings made by the government.
“Honestly, I do not know why he included borrowings made by both companies as government borrowings.
“The borrowings made by the companies are both their own respective corporate matters for cash flow or capital needs. This is their debt, their responsibilities,” he said.
