Again Prime Minister Anwar Ibrahim's government showed that they DO NOT CARE about workers in the private sector, self employed, the POOR or B40 Class - They only care for public officer's or government employees and government pensioners/retirees when the Hari Raya Aid failed flow to everyone.
The government has agreed to grant a RM500 special Aidilfitri aid to Grade 56 civil servants and below by Friday. Prime Minister Datuk Seri Anwar Ibrahim said this also includes contractual appointments.He said RM250 would also be channeled to retirees and veterans.
If the government gave aid to just employees earning RM3,000 or less - but no, they gave it to all Grade 56 and below, and grade 56(Salary of aboutRM6,500 - Rm14,000 plus a month?) Should it have been staggered - with the low earners getting more like those earning RM1,500 getting RM500, if earning below RM3,ooo getting RM250...Now even those earning RM10,000 or RM1,530 gets the same amount of "Raya Aid'.
Malaysian Debt
Federal Government Debt (plus liabilities because government guaranteed loans, etc) RM1.5 Trillion
State Government Debt - ????
Local Government Debt - ????
Government Owned or Linked Companies DEBT - ????
Malaysian Household Debt - RM1.5 trillion(aggregate)
# Household Debt is the debt you/I have uncured. It is the loans we have taken, the outstanding payment on HP agreements, Credit card debts, etc.... It is different from the government's debt. If you cannot pay off your loans, then you may risk lose of homes, cars, etc. You may end up bankrupt, and your companies wound-up.
So now, we have a situation where the Federal Government's DEBTs(plus liabilities) is at about RM1.5 Trillion, and the Household Debt stands at roughly RM1.53 Trillion.
Federal Government Debt - Malaysia's national debt including liabilities has reached
RM1.5 trillion and should be addressed urgently, Prime Minister Datuk Seri Anwar Ibrahim said. - NST,17/1/2023
Prime Minister Datuk Seri Anwar Ibrahim announced that the total Federal Government debt for 2023 stood at RM1,172.5 billion, accounting for 64.3 percent of the gross domestic product (GDP), compared to RM1,079.6 billion or 60.3 percent of GDP in 2022.
The aggregate debt for households in 2023 has amounted to RM1.53 trillion, the Dewan Rakyat was told.Finance Ministry in a parliamentary written reply on Monday (March 18) said of the total, the largest portion of the debt was housing loans which comprised 60.5 per cent of the debt, followed by vehicle loans (13.2 per cent) and personal financing (12.6 per cent).
It added that other loans for other purposes include non-residential property purchases, credit card debt, securities and others.In aggregate, the total household debt for 2022 was RM1.45 trillion, followed by 2021 (RM1.38 trillion), 2020 (RM1.32 trillion), 2019 (RM1.25 trillion), and 2018 (RM1.19 trillion), said the ministry.- NST, 19/3/2024
When we are facing economic hardships, we spend less and practice austerity. But, unfortunately in Malaysia, it seems, the government adopts 'All is OK' and continue to spend and borrow as usual or even more.
The attitude adopted by the Prime Minister and the government of the day, even the current government, is a 'don't care' attitude - let the future government and people worry about that. The priority seems to be maintaining public support for the government - so, we borrow more and spend...hand out 'Raya Aid", toll free for Raya.
Was the 'Raya Aid" simply an attempt of current government to lobby support from Malaysian Civil Servants - well, that is so old-fashioned. Now, you give me money, I say thank you and take it BUT when elections come I vote for the BEST candidate not necessarily the current government's parties candidate. You cannot 'BUY' Malaysian's vote anymore - obvious after GE14.
Can we consider this 'Raya Aid' a BRIBE?
TOL FREE during festivals > How much exactly did PM Anwar's government spend - A few billion? Well, they never told us, did they? Tol operators would not do this for free - they would only do that if the government compensate their loss of earnings - so, how much was spent? Tol free only benefits vehicle owners - not people who travelled by bus, train or taxis... Not, the poor who were not able to afford travel despite it being TOL free.
Now again, Prime Minister Anwar Ibrahim displays no care for the POOR in Malaysia. Just like previous BN regimes, Raya Aid is given out to ONLY to civil servants and retirees...TOL Free only benefit car owners - no benefit for those who travel by bus, trains, taxis,....
If he gave RAYA AID for all the poor, or the B40 class or the 'absolute poor' and hardcore poor, it will be different. Does this government do not respect the majority who work in the private sector or are self employed? Why SPECIAL TREATMENT to government employees only?
Households earning less than RM1,169 monthly are categorised as hardcore poor, Rafizi had told the Dewan Rakyat last week. Absolute poverty — the condition where an individual or a family does not make enough money to meet fundamental needs — covers those with incomes below RM2,208.
There are so many POOR in Malaysia, those earning less than RM2,208 - they are MORE ENTITLED to "Raya Aids' and festival aids so that at least once a year they can celebrate a decent Raya with friends and family.
TALKING ABOUT FEDERAL GOVERNMENT DEBT - Surely Prime Minister Anwar can give us 3-monthly reports > so we know whether the DEBTS and liabilities are continuing to rise, or is it reducing?
Under Budget 2024, debt service charges alone are expected to account for about 16%, or RM50bil of the total operating expenditure this year, as compared to about 15%, or RM46bil, of total operating expenditure in 2023.In January 2023, the Federal Government debt(and liabilities) was RM1.5 Trillion, so what is the DEBT in 2024? If the DEBT increased, maybe the Finance Minister ought to be 'sacked'
RM500 Hari Raya aid for Grade 56 civil servants and below : PM
PUTRAJAYA: The government has agreed to grant a RM500 special Aidilfitri aid to Grade 56 civil servants and below by Friday.
Prime Minister Datuk Seri Anwar Ibrahim said this also includes contractual appointments.
He said RM250 would also be channeled to retirees and veterans.
"So today, corresponding to the 21st of Ramadan 1445, I announce that the government has agreed to distribute a special Aidilfitri aid of RM500 to all civil servants Grade 56 and below including contractual appointments.
"RM250 would also be channelled to all government retirees including pensioned and non-pensioned veterans.
"I have instructed the Treasury Department for the aid to be channelled beginning Friday," he said.
Previously, the Congress of Unions of Employees in the Public and Civil Services (Cuepacs) has called on the government to channel a special Aidilfitri aid to civil servants as they did so for the past 10 years.
Its president Datuk Adnan Mat said the aid would not only help the civil servants but also businesses. - NST, 1/4/2024
Weighed by huge debt burden
- Economy
-
Saturday, 03 Feb 2024
MALAYSIA has long had to contend with the issue of rising public debt in recent years.
As at end-August 2023, the total federal government debt stood at RM1.15 trillion or 62% of gross domestic product (GDP), below the stipulated debt ceiling of 65% of GDP.
The amount was largely denominated in ringgit, with a share of 97.4% of the total debt, while the remaining 2.6% was in foreign currencies.
It is, however, estimated that Malaysian government debts and liabilities have risen to about RM1.5 trillion. This implies an increase in debt servicing charges and a narrowing of fiscal space to implement new projects or prepare for economic shocks.
Under Budget 2024, debt service charges alone are expected to account for about 16%, or RM50bil of the total operating expenditure this year, as compared to about 15%, or RM46bil, of total operating expenditure in 2023.
Be that as it may, economists in general are not so concerned about the government debt level, pointing out that it remains manageable at current point and any associated risks appear to be well contained.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid, for one, argues that the government debt level is still sound, as the bulk of its debt is raised internally. As such, the government should be able to service its own currency debt almost seamlessly.
He adds: “The existence of large institutional investors such as the pension funds, banks, insurance, fund managers and foreign investors will ensure that every government securities issuance will be fully taken up, and in fact, it will be oversubscribed.”
He tells StarBizWeek that addressing the debt issue is not so much a matter of urgency but rather it is to give the government more fiscal space to address the needs of the nation and to showcase its financial discipline, which will boost market confidence.
Cost load
Meanwhile, Malaysia University of Science and Technology economics professor Geoffrey Williams says the current government debt rate is less likely to be risky.
In fact, he tells StarBizWeek that the government debt has actually decreased, and that in spite of many people’s worries, Malaysia’s debt-to-GDP ratio is actually quite low as compared to many other nations, including Singapore.
Sharing Afzanizam’s opinion, Williams says the majority of government debt is held by Malaysians or Malaysian institutions, which explains why the debt is not at a risky level.
“So, there is no particular risk exposure to overseas lenders,” he adds.
However, Williams says, the issue of concern is the high debt service costs, totalling about RM50bil this year.
“These
take up a great portion of the operational expenditure from the
government, which could be better used on health, education, and social
protection,” he explains. -
Having said that, Williams says good fiscal management is essential to cut wastage, leakages and corruption, as he believes there is more significance in keeping the nation’s debt number from rising as compared to finding ways to bring it down.
Focus on growth
AmBank Malaysia Bhd chief economist Firdaos Rosli adds to the point as he says its crucial to note that Malaysia had a far greater debt level in the past, peaking at 103.4% of GDP in 1986.
He says despite this high level of government debt, Malaysia saw fast development following the “Volcker shock” crisis in the mid-1980s, with the nation’s growth rate averaging 9.3% yearly from 1987 to 1997.
“Therefore, I believe the bigger question about debt levels is not how much or the level of debt itself but how much growth an economy can generate from debt accumulation. In other words, what we do with the debt matters, not the debt level,” he adds.
According to Firdaos, deficit control may slow growth even further, thus it is important to reevaluate if the move is worth pursuing.
“In my view, we could highlight areas where we can generate higher growth, such as decentralisation, liberalisation or a greater push for mega projects in areas with the greatest economic multipliers,” he says.
On the question of whether the government has done enough in addressing the issue, Afzanizam says the passing of the new Public Finance and Fiscal Responsibility Bill 2023 shows that the government is serious about fiscal consolidation.
He continues by stating that the execution and impact of the government’s efforts to reduce the nation’s mounting debt is the most crucial factor to take into account.> see page 11“More importantly, how all these initiatives will be communicated to the general public in order to get their full buy-in” he says.
Under the Public Finance and Fiscal Responsibility Law that was passed last October, the government has outlined a series of targets that needs to be achieved within three to five years. Among these are keeping the total federal government debt levels at 60% of GDP or less, lowering the fiscal deficit to 3% of GDP or less.
Contingent liabilities
In addition to the higher budget allocation for 2024, Williams says that higher revenue forecast of RM307.6bil, lower deficit and debt ratios, as well as the rescheduling of several projects, is sufficient for the time being, as the government attempts to address the national debt situation.
In spite of that, he says contingent liabilities carry greater risk, especially in the case of the National Higher Education Fund Corp (PTPTN), which has an RM67bil contingent liability.
“The government is not doing enough to deal with this. PTPTN is a significant risk because the repayments have not kept pace with the loans issued, and it has been short of funds,” he says.
Williams believes that in order to solve this issue, the government must make higher education free to stop the debt rising, and pass the debt to the Debt Management Office in the Finance Ministry to oversee debt recovery and lower risk.
Separately, Firdaos believes that Malaysia has elbow room to accumulate debt for growth.
“A developing economy such as Malaysia must take the necessary actions to ensure that the economy grows faster, irrespective of the level of debt.
There is no quick fix to address this issue, as moving the supply side of an economy is usually arduous, complex and slow. More importantly, it requires a tremendous amount of political will,” he says.
Hence, he believes boosting growth rates and putting less emphasis on debt levels is the wisest course of action.
Number matters
Budget 2024 has allocated RM393.8bil for total expenditure, of which RM303.8bil will be for operating expenditure and RM90bil for development expenditure.
With revenue collection expected to be RM307.6bil, fiscal deficit in 2024 is expected to moderate to 4.3% of GDP from about 5% in 2023.
In a recent report, Hong Leong Investment Bank Research estimated that under a baseline scenario, where there is a gradual reduction of primary deficit as a result of fiscal consolidation efforts, Malaysia’s debt-to-GDP ratio could trend down to below 60% in 2028 from about 63% in 2023.
In an alternative scenario, however, where there are no fiscal reforms, the debt-to-GDP ratio is projected to reach the debt sustainability analysis threshold of 70% in 2028, surpassing the federal government statutory debt limit of 65% starting 2025.
Maybank Investment Bank Research estimated that as at end-September 2023, the federal government statutory debt, comprising the Malaysian Government Securities, Malaysian Government Investment Issues and Malaysian Islamic Treasury Bills, stood at 60.4% of GDP.
The brokerage projects that the federal government total debt would hover around 64% of GDP by end-2024, mainly for financing strategic development projects under the 12th Malaysia Plan, including flood mitigation programmes, central spine road, Pan Borneo Sabah and Sarawak highways, Rapid Transit System Link project between Johor Bahru and Singapore as well as National Fiberisation and Connectivity Plan or currently known as Pelan Jalinan Digital Negara.
CGS-CIMB Research concurs, noting that despite a better fiscal deficit number for 2024, the government’s total debt ratio is projected to worsen to 64% of GDP this year against 62% of GDP estimated for 2023.
Similarly, it notes, debt service charges will likely worsen to around 16% of revenue in 2024, climbing higher from 15% in 2023, thus breaching the internal guideline of 15% of revenue as set by the Finance Ministry.
“Worse, growth in debt service charges at 8% year-on-year surpasses nominal GDP growth of 6.5%, implying an ongoing struggle with debt affordability. The rising interest rate environment and pandemic ‘debt scarring effect’ played a part in the ballooning costs,” CGS-CIMB Research points out in its report about Budget 2024.
The brokerage acknowledges that the marked improvement in fiscal deficit from 5% of GDP in 2023 to 4.3% of GDP in 2024 is a welcome development.
However, the worsening debt metrics, especially the rising debt service charges and government debt, does not ease concerns, CGS-CIMB Research says.
Meanwhile, AMRO Asean+3 Macroeconomic Research Office in a recent report highlights that to minimise the financial stability risks of public debt, some economies should implement fiscal consolidation to stabilise or manage the ongoing rise in public debt, which was exacerbated by the pandemic fiscal stimulus programmes.
It notes that a wealth of research shows that elevated government debt not only can slow economic growth but also can heighten the risk of fiscal crises.
“As
such, determining the optimum size of public debt is a critical decision
that considers the needs for more fiscal spending on infrastructure
investment and other important social needs and the long-term negative
impacts of excessive borrowing. Possible solutions include boosting
revenue, optimizing expenditures, and adopting fiscal rules,” it
explains. - Star, 3/2/2024
Malaysian household debt at RM1.53 trillion in 2023
KUALA LUMPUR: The aggregate debt for households in 2023 has amounted to RM1.53 trillion, the Dewan Rakyat was told.
Finance Ministry in a parliamentary written reply on Monday (March 18) said of the total, the largest portion of the debt was housing loans which comprised 60.5 per cent of the debt, followed by vehicle loans (13.2 per cent) and personal financing (12.6 per cent).
It added that other loans for other purposes include non-residential property purchases, credit card debt, securities and others.
In aggregate, the total household debt for 2022 was RM1.45 trillion, followed by 2021 (RM1.38 trillion), 2020 (RM1.32 trillion), 2019 (RM1.25 trillion), and 2018 (RM1.19 trillion), said the ministry.
"The ratio of household debt to gross domestic product (GDP) at the end of 2023 slightly increased to 84.2 per cent compared to 2018 (82 per cent)," the ministry said.
The ministry said this in response to Pang Hok Liang (PH-Labis) who enquired the ministry to state the country's aggregate household debt from 2018 to 2023.
Meanwhile, the ministry said the average annual growth of household debt was 5.1 per cent from 2018 to 2023.
"The annual growth in household debt was primarily driven by housing and vehicle loans following various incentives offered by the government, private sectors as well as the sales and service tax (SST) incentives for motor vehicle purchases between 2020 and 2022." NST, 19/3/2024
Malaysia's national debt now at RM1.5 trillion, or over 80pct of GDP
PUTRAJAYA: Malaysia's national debt including liabilities has reached RM1.5 trillion and should be addressed urgently, Prime Minister Datuk Seri Anwar Ibrahim said.
This was already more than 80 per cent of the country's gross domestic product (GDP).
The figure also suggests that Malaysia's budget deficit will widen further than the earlier estimate of 5.8 per cent of the GDP for 2022.
"The economic uncertainties are still not easing. The economy is still considered dim and this was also contributed externally including the Ukraine-Russia conflict as well as global recovery post-Covid.
"The problem with our debt is it has already touched RM1.2 trillion and if includes liabilities, it is RM1.5 trillion.
"We have to accept this reality. We cannot feel complacent, living with the culture of contentment as if there is no problem," Anwar said during the 2023 Budget dialogue here today.
Also present were deputy Finance Ministers Datuk Seri Ahmad Maslan and Steven Sim Chee Keong, as well as deputy secretary general of treasury Datuk Johan Mahmood Merican.
The new 2023 Budget is expected to be tabled in the Parliament on Feb 24.
The original 2023 was presented on Oct 7 by the then finance minister Tengku Zafrul Abdul Aziz with a total allocation of RM372.3 billion but was not approved due to the dissolution of Parliament three days later to make way for the 15th general election (GE15).
Anwar was reported to have said that the government will look at the proposals in the budget tabled by the previous government and make the necessary changes before tabling his government's budget.
Meanwhile, Anwar said it had taken him only two months in the office to recognise that the government would be able to save around RM10 billion from leakages from its procurement system.
Hence, he said the mandate of the unity government remained -
to change the orientation of the system in order to ensure that the
vast majority of citizens benefit from economic initiatives and reforms. - NST, 17/1/2023
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