Putrajaya sold national assets to achieve 2013 deficit target, claims Rafizi

Rafizi called the revelation 'shocking' as the Najib administration had resulted to selling and mortgaged national assets 'to bear its excessive spending and wastages'. — Picture by Choo Choy May
Rafizi called the revelation 'shocking' as the Najib administration had resulted to selling and mortgaged national assets 'to bear its excessive spending and wastages'. — Picture by Choo Choy May

PETALING JAYA, Dec 20 — The Najib administration sold and mortgaged national assets to hit its 4 per cent deficit target for 2013, a move that PKR’s Rafizi Ramli described today as “shocking” proof of Putrajaya’s poor fiscal management.

The Pandan MP cited the latest World Bank report on Malaysia to back his claim, noting that it had said the Najib government will achieve the target to reduce its deficit to 4 per cent through non-tax resources that included RM1.4 billion gained from “asset sales” and RM4.2 billion from “securitization of government mortgages”.

The report, entitled Malaysia Economic Monitor: December 2013, read:

“The government is expected to meet is headline deficit target for 2013 as additional non-tax collections offset higher expenditures on subsidies.

“Despite estimated operating (current) expenditures exceeding their budgeted 2013 allocations by RM14.3 billion (7.1 per cent) and slightly worse GDP growth compared to the previous year’s forecast, the government reaffirmed its headline deficit target for 2013 (4.0 per cent vs 4.5 per cent in 2012).

“This target will be achieved through additional tax revenues. Of the additional RM11.8 billion in revenues expected to be raised...RM7.4 billion originated from non-tax sources, including RM1.4 billion of proceeds from asset sale and RM4.2 billion from the securitization of government mortgages”.

Rafizi called the revelation “shocking” as the Najib administration had resulted to selling and mortgaged national assets “to bear its excessive spending and wastages”.

“I suspect the plan to sell national assets have already occurred because it is intended to achieve the 4 per cent target deficit for 2013 which actually had failed.

“This means national assets have already been sold and mortgaged so that it would gain returns in 2013 to close the national income and spending gap,” he said.

Rafizi added that the move to sell national assets would have sparked an uproar in other countries but the Malaysian media had apparently neglected the revelation.

“It seems that only a few are that are taking this matter seriously and it’s all jolly good in Putrajaya”.

The Pandan lawmaker said he will be seeking to convene an emergency parliament sitting to scrutinise the Najib administration’s poor fiscal management.

He pointed out that Prime Minister Datuk Seri Najib Razak had resorted to an easy way out of selling off the country to trim its chronic deficit instead of curbing corruption which the opposition claimed is costing the country billions yearly.

Recently Rafizi said Najib should relinquish his post as Finance Minister to take responsibility for the billions of ringgit Malaysia has lost through crime and corruption.

The PKR strategy director said the latest report by international anti-corruption group Global Financial Integrity (GFI) on the country’s illicit outflows proves the correlation between capital flight and corruption here.

The report, which said Malaysia lost US$54 billion (RM174 billion) in 2011 alone, also appears to corroborate with the wastage highlighted every year in the Auditor-General’s Report and the fact that the country has been operating on a deficit budget for 15 consecutive years.

According to the GFI report released on December 12, Malaysia lost over US$370 billion (RM1.2 trillion) to illicit outflows in 10 years since 2002 and US$54 billion in 2011 alone.

The massive loss of capital via illegal channels meant Malaysia was now fourth in a list of countries worldwide haemorrhaging funds to crime, corruption and misreporting, behind only China, Russia and Mexico in terms of severity. Malaysia was fifth in the previous edition.

“Anonymous shell companies, tax haven secrecy, and trade-based money laundering techniques drained nearly a trillion dollars from the world’s poorest in 2011, at a time when rich and poor nations alike are struggling to spur economic growth,” GFI chief Raymond Barker said in a release accompanying the report.

“This study should serve as a wake-up call to world leaders: The time to act is now.”

In its report titled “Illicit Financial Outflows from Developing Countries: 2002-2011”, GFI categorised such activity as all unrecorded private financial outflows involving capital that is illegally earned, transferred, or utilised, generally used by residents to accumulate foreign assets in contravention of applicable capital controls and regulatory frameworks.

It explained that this included funds earned legitimately, such as the profits of a legitimate business, as their transfer abroad in violation of exchange control regulations or corporate tax laws would render the capital illicit.

Asia as a whole were the largest “exporters” of illicit wealth, accounting for 39.6 per cent of the US$946.7 billion that GFI recorded in 2011. The total figure also represented a 13.7-per cent growth from the previous year, and an average of 10.2 per cent annually since 2002.

The report said Malaysia has seen illicit outflows climb gradually from US$19.7 billion (RM63.6 billion) in 2002 to a peak of US$64.5 billion (RM208 billion) in 2010 before dipping to US$54 billion (RM174 billion) the year after. On average, US$37 billion (RM119 billion) left the country unrecorded for every year of the decade.

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