In a recent report, which was CONFUSING - it looked like good news on 1st reading - news that Malaysia's debt was reducing....but it was the OPPOSITE - our Malaysian Debts under Anwar Ibrahim is INCREASING...and in 2023, it increased by RM90 plus Billion.
BUT, on 2nd reading - we see that all that Anwar seems to be PROUD about is the fact that in 2023, Malaysia BORROWED less than compared to previous years before...only RM93 Billion...compared to previous years when MALAYSIA annually borrowed RM100 billion....
Malaysian Federal Government Debt? How did Anwar managed to reduce the DEBT? Was it paid off or simply transferred to another? TELL us
What our 'disappointing' Finance Minister(also Prime Minister Anwar Ibrahim) is doing is SIMPLY reducing the amount of NEW DEBTs or rather NEW LOANS - so from borrowing RM100 Billion annually in 2021 and 2022, Anwar reduced NEW LOANs to RM93 Billion in 2023, and plans to reduce NEW LOANS in 2024 to maybe RM86 Billion - FOOLISHNESS, in my opinion - when what he should really be doing is to reduce spending and STOP borrowing- spending not more that what Malaysia earns annually - and if he was smart, he could have used monies saved by reduced spending to DECREASE Malaysia's LOAN - hence the amount for 'DEBT SERVICING'.
“Our goal is to reduce borrowing despite existing debt. For example, the debt was RM100 billion in 2021 and 2022.
“In 2023, we reduced it to RM93 billion, and for 2024, we aim to lower it further to RM86 billion. This gradual reduction is crucial for continuing our development efforts,” he said in his speech at the National Tax Conference 2024 here today.
Everyone knows that when one has to take LOANS - we still have to pay of the monthly/annual loan interest, and also more depending on the type of LOANS - some of which, one has to pay all outstanding when it is just a LOAN(that demands full repayment) after the lapse of certain defined period.
"These loan receipts were used to repay matured debts amounting to RM20.6 billion, with the remaining RM49.9 billion used to cover the deficit and future maturing debts," he said in a parliamentary written reply.
SORRY - I was misled by the media report titles like 'PM Anwar says Malaysia’s debt going down, aims to lower it to RM86b for 2024 by cutting sovereign loans' - Malay Mail, 22/7/2024- it should really have been ''PM Anwar says Malaysia’s NEW ANNUAL debt going down, aims to lower the new loans taken to RM86b for 2024 by cutting sovereign loans'
So, the problem arises from reporters and media getting confused with the words or representations made by PM/Finance Minister. Anwar need to be VERY CLEAR - What is the Federal Government Debt? What is the Federal Government Liabilities? Additionally, how much of the Loans of 'others' have the Federal Government stood as 'Guarantors'?
Remember, in January 2023, Anwar said'"The problem with our debt is it has already touched RM1.2 trillion and if includes liabilities, it is RM1.5 trillion.' - NST, 17/1/2023
Does the figures INCLUDE the amount the Government has stood GUARANTOR for other loans?
Herein, lies the problem - should not Anwar(being a Finance Minister) STOP new borrowings > and 'tighten our belts' and stay within the amount of monies we earn annually - NO more FISCAL DEFICITS - let's have a BUDGET SURPLUS.
Fiscal deficit is the difference between the total revenue and total expenditure of a government in a financial year. Fiscal deficit arises when the expenditure of a government is more than the revenue generated by the government in a given fiscal year.
The opposite of a budget deficit is a budget surplus. When a surplus occurs, revenue exceeds current expenses, resulting in excess funds that can be further allocated.
Like past Prime Ministers - Anwar has been SPENDING and spending - maybe to appease the people by being seen as giving them MONIES - Subsidies being cut, civil service wage increase by 13 per cent(the highest in Malaysia's history), 'bai-outs' to certain ...
The government will allocate supplementary subsidies totalling about RM100 million to Felda to cover increases in plantation operating costs due to the removal of blanket subsidies for diesel, says Prime Minister Anwar Ibrahim. - WHY? Would they not have been covered by the 'Targetted subsidies'?
Prime Minister Anwar Ibrahim has announced an allocation of over RM130 million for Felda settlers, with RM100 million to ease their burden following the implementation of the targeted diesel subsidy programme. He also said RM31.7 million will be allocated for 317 Felda plantations for the “Program Sejahtera Komuniti Madani (Sejati Madani)” scheme.
Question - All other plantation companies are doing OK - why is FELDA 'failing' - is it because of 'political appointees'. RM100 Million to FELDA or FELDA Settlers. FELDA Settlers have their own plantations, and FELDA has nothing to do with settlers Plantations ... when nationally, already the poor are receiving subsidies, which will include the 'poor' FELDA Settlers - so are they getting 2 different subsidies for the same thing?
WHAT do Malaysians WANT? REDUCE DEBTS - so reduce the amount that we waste in debt financing? Or continue to BORROW ....??ME - I would be inclined to REDUCE National DEBT - so we will have more money to spend for development rather that debt financing/etc - Looks likes in 2023, to repay matured debts amounting to RM20.6 billion, with the remaining RM49.9 billion used to cover the deficit and future maturing debts..Would it not have been better if we had that 70 Billion used for DEVELOPMENT that will benefit all Malaysians????
As it goes, national DEBT will not be reduced - but simply GROWING at a slower rate if Anwar continues as the Finance Minister...
Is it time for a NEW Finance Minister?
NSTLeader: Reform dividends
Not many Malaysians spared a thought for the implications of our substantial national debt. Why should they, when there's little visible impact on their lives? That notion was shattered after the 1Malaysia Development Bhd (1MDB) scandal erupted into the public consciousness.
Suddenly, people were educated on the workings of national debt, especially after hearing about the culprits' cavalier spending on luxury items hoarded in swanky apartments. It would have been fortunate had the stolen 1MDB funds been limited to a shopping splurge. But the bulk of the funds were siphoned out of the country, totaling a mind-blowing RM48 billion, based on the government's report on its 2023 debt servicing.
Despite this, Malaysia has remained resilient, even with politicians and moguls seeking lucrative government contracts. The country hasn't collapsed despite the RM1.4 trillion debt reported by the Auditor General. However, another RM94.1 billion in debts was accrued in 2023. After all, money had to be spent on development, social welfare, healthcare, and education. This spending highlights the ongoing need for careful financial management.
Finance Minister Datuk Seri Anwar Ibrahim has maintained a firm grip on the country's purse strings. He has determinedly reduced new debt, first to RM100 billion in 2021 before paring it down to RM93 billion in 2023, and aims to cap it at RM86 billion this year. Anwar's efforts to control the national debt are part of a broader strategy to ensure financial stability and prevent future fiscal crises.
To achieve his mission of zero leakages or misappropriation, Anwar has implemented a broader crackdown on high-level corruption in the government. This approach involves stringent measures and comprehensive oversight to ensure public funds are used appropriately. Anwar has achieved these savings by deploying a bold debt restructuring plan and rolling out multi-pronged, albeit unpopular, reforms to reduce spending and reboot the economy. The much-maligned diesel subsidy rationalization will liberate RM4 billion in annual government spending.
In the 2024 Budget, a higher service tax, high-value goods tax, and new capital gains tax were proposed to diversify revenue sources and increase returns. These measures are crucial for building a more robust and sustainable fiscal framework. Additionally, a progressive wage policy promises to improve workers' wages, accompanied by productivity gains. This policy aims to balance economic growth with social equity, ensuring that the benefits of development are widely shared.
Anwar's introduction of the National Energy Transition Roadmap aims to shift from a traditional fossil fuel-based economy to a high-value green economy. This transition is part of a broader effort to align Malaysia's economic development with global environmental standards and trends. Anwar also conceived the New Industrial Masterplan 2030, which focuses on driving manufacturing while aiming to lift the gross domestic product by 6.5% annually. This plan is designed to boost Malaysia's competitiveness and innovation in the global market.
These bold initiatives spurred influential American investment bank JP Morgan to upgrade Malaysia's debt rating from underweight to neutral. Forbes agreed that the economy is moving towards a "high-growth and high-value" trajectory. These positive evaluations reflect growing confidence in Malaysia's economic management and future prospects. While these economic reforms are a bitter but necessary pill to swallow, they have understandably drawn public resistance from a populace unused to financial discipline.
Nonetheless, Anwar is resolute in remediating and realigning the economy after a maddening decade of notorious corruption. His commitment to transparency and accountability is a crucial element of his economic strategy. Citizens will need to temper their fury and pessimism, as these reforms will take time to materialize into direct benefits that will swell their pockets. The road to economic recovery is long, but with the right policies and perseverance, the benefits will eventually become evident to all. - NST, 24/7/2024
PM: Federal govt debt hits RM1.22 trillion as of end April this year
KUALA LUMPUR: The federal government's debt has increased by RM50 billion to RM1.22 trillion as of the end of April this year, compared to RM1.17 trillion at the end of last year.
Prime Minister Datuk Seri Anwar Ibrahim, who is also Finance Minister, said the government had taken gross loans amounting to RM70.5 billion in the first four months of this year.
This, he said, included the issuance of Malaysian Government Securities totalling RM30 billion, Government Investment Issues (RM34.5 billion) and Malaysian Treasury Bills (RM6 billion).
"These loan receipts were used to repay matured debts amounting to RM20.6 billion, with the remaining RM49.9 billion used to cover the deficit and future maturing debts," he said in a parliamentary written reply.
Anwar said this in response to Ahmad Amzad Mohamed (PN-Kuala Terengganu), who asked for the justification for the increase in the government's debt in the first four months of 2024.
He added that the increase in the federal government's debt each year was also due to the need to borrow to finance the fiscal deficit, which is to fund development expenditure (DE).
"DE is crucial as it constitutes public investment with a multiplier effect in driving the country's economic growth.
"The borrowings will continue to increase the government's debt level as long as the government's financial position remains in deficit."
Meanwhile, he added that the government is committed to maintaining a fiscal consolidation trajectory with a deficit reduction in 2023 to 5.0 per cent of Gross Domestic Product (GDP) or RM91.4 billion compared to 5.6 per cent in 2022 (RM99.5 billion).
"The fiscal deficit in 2024 is projected to further decrease to 4.3 per cent of GDP or RM85.4 billion.
"The effort is able to improve the public financial position and further reduce the debt burden in the medium and long term."- NST. 16/7/2024
This Chart Shows How Najib Drove The Country To RM1 Trillion In Debt
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May 22nd, 2018 by financetwitter
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We wish to say “I told you so” again. But to hear it from the horse mouth – Mahathir – is equally satisfying. Yes, Malaysia has already breached the RM1 trillion marks, for the wrong reason. Speaking for the first time to staff of the prime minister’s office, Mahathir revealed the troubling debts accumulated, thanks to 9 years of corrupt Najib administration.
When Mahathir resigned in 2003 after ruling for 22 years (1981 to
2003), the debt was only about RM190 billion. After he passed the baton
to Abdullah Badawi, the sleeping head doubled the nation’s debt to about
RM380 billion. But after Najib Razak took over the country, he tripled it to RM1 trillion in debts. In short, Najib doubled the debt in 4 years what Badawi would have done in 8 years.
During the 14th election campaign, Najib Razak conveniently used the national debt as a weapon to attack his opposition. He warned the people that a victory for the opponent coalition Pakatan Harapan’s would cause debt to skyrocket. He claimed that the opposition’s promise to abolish GST (goods and services tax) and road toll collection would increase national debt to RM1.1 trillion.
Najib, of course, didn’t want the people to know that his regime had already clocked the RM1 trillion figures. By first quarter of 2017, the country was already burdened with RM916.12 billion. Since Najib came to office in 2009, Malaysia’s debt has grown at an average of 10% a year. Hence, if you look at the government gross debt chart, the first number of debt figure will jump – every year (get the picture?).
The worst part is this – despite abolishing subsidies for petrol, diesel, sugar, cooking oil, electricity tariffs, water and whatnot, Najib regime somehow still couldn’t find the money to run the government efficiently. The son of Razak was practically stealing rice from a beggar’s bowl when he introduced 6% GST (goods and services tax) on 1 April 2015.
Do you need more proof that the despicable and corrupt Najib had been stealing from the people to live lavishly? The clearest proof of excessive spending, and even corruption for that matter, can be found in this chart – the yearly allocation for the Prime Minister Office (PMO). In his first year as prime minister, the budget for the PMO breached RM10 billion for the first time in the history.
The yearly budget for the PMO continued to climb and reached the climax when it hit the RM20 billion in 2016. Now we know why a small nation with 32-million populations need to pay RM20 billion for the operation of Najib’s office. After the stunning defeat of Barisan Nasional coalition government, it is discovered that a whopping 17,000 “political appointees” were hired by the previous government.
Prime Minister Mahathir Mohamad, shocked, said the contracts for the highly paid 17,000 “political appointees” will be axed. This will reduce the expenditure. Assuming each of them was paid a conservative RM5,000 every month, the annual expenses would hit RM1 billion already. When Mahathir resigned in 2003, the PMO was allocated merely RM3.5 billion.
However, paying top dollar for 17,000 “political appointees” to boost Najib’s image wasn’t the only wastage policy adopted by the former prime minister. His wife, Rosmah Mansor, was the biggest beneficiary from the massive yearly budget to the PMO. Auntie Rosie’s pet project – Permata Programme – was allocated RM100 million and RM111 million in 2010 and 2011 Budget respectively.
When Najib presented the 2013 Budget, the so-called pre-school
education programme was allocated a whopping RM1.2 billion. The amazing
part about the “Permata” programme is that nobody knows how the money
was being used. In fact, the programme has been such a cash-cow to Rosmah that even after his husband has lost, she insisted the new government to retain the project.
Najib’s previous government operated without transparency. As the
finance minister himself, he spent excessively and lavishly without
thinking about the source of income. His answer to lack of funding was
to borrow money. One of Najib’s tricks in hiding the RM1 trillion debts
accumulated over the years – exclude the government-guaranteed debt.
Based on statistic from Bank Negara Malaysia (Central Bank), the debt guaranteed by the Federal Government is at eye-popping RM238 billion. And thanks to the declassification of 1MDB audit report after Najib was defeated in the 14th general election, it has been revealed that the state investment fund was drowning in debt. Now, where is that Arul “Anaconda” Kanda guy when you need him the most?
According to the audit report – assuming there are no new loans after
October 2015 – it was estimated that RM42.26 billion was needed to pay
the principal and interest that will be due between November 2015 and
May 2039. 1MDB also needs a minimum of RM1.52 billion every year for 10 years from November 2015 to May 2024 just to pay back its loans.
In short, the declassified report said the scandal-tainted firm had debt commitments totalling RM74.6 billion,
inclusive of interest and borrowing costs, from November 2015 to 2039.
That’s about RM3 billion of debt commitment every year – for the next 25
years. This is what going to make the country in serious trouble, if
billions of dollars plundered by Najib is not recovered.
Now, do you understand why newly sworn-in finance minister Lim Guan
Eng is roped in to clean the shit left by the former Thief-in-Chief
Najib Razak? Based on his track record in managing Penang finances, only
Mr. Lim has the ability to fix the problem. Crooked Najib was
essentially driving the country to the brink of bankruptcy, had he not stopped in time. -http://www.financetwitter.com/2018/05/this-chart-shows-how-najib-drove-the-country-to-rm1-trillion-in-debt.html
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