KUALA LUMPUR (Oct 6): Parliament's Public Accounts Committee (PAC) on Thursday (Oct 6) raised concern over an increase of RM100 billion in the federal government's debt from 2020 to 2021.
With the increase in debt, Putrajaya's total liability in 2021 amounted to RM1.298 trillion, which was 84% of the country's gross domestic product (GDP), said PAC chairman Wong Kah Woh.
"The PAC is concerned with the increasing trend of the federal government's debt. It found that the debt in 2021 amounted to RM979.814 billion (63.4% of GDP), an increase from RM879.56 billion in 2020," he said.
Wong was speaking at a press conference in Parliament building, after the PAC's briefing with Auditor General Datuk Seri Nik Azman Nik Abdul Majid. The auditor general's report on the financial statements of the federal government, state governments and state agencies for 2021 was tabled in Dewan Rakyat earlier in the day.
Wong noted that the government made gross borrowings amounting to RM217.201 billion in 2021, an increase of 11.6% from RM194.55 billion in 2020. Of this, he said 52.4% or RM113.764 billion was used for the principal payments of maturing loans.
He said the gross borrowings transferred to the Development Fund amounted to RM62.317 billion, equivalent to 28.7% of total borrowings, while the transfer to the Covid Fund was as much as RM38 billion or 17.5%.
"Out of the total RM62.317 billion that was transferred to the Development Fund, only RM40.994 billion (65.8%) was used for development expenditure purposes, compared to RM37.53 billion (77.3%) in 2020, while a total of RM12.612 billion (20.2%) was utilised for the PFI (private finance initiatives) liabilities and commitments on guarantees, and RM8.711 billion (14%) was for a reclassification from operating expenditures," he said.
On top of that, Wong said that 16.3% of the government's revenue collection had been used for loan interest payments.
"That is, for every RM1 collected, 16 sen is used for loan interest payments," he said.
According to the PAC, the government's revenue collection in 2021 was RM233.752 billion (2020: RM225.075 billion), of which RM173.703 billion was from tax collections.
The PAC plays a checks-and-balances role towards the executive branch in financial management and procurement to ensure that it complies with the procedures set out in the country.
There is basis for sharp increase in govt debt, says Auditor-General
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