THE Government has been urged to pay attention to Federal debt which saw an increased by RM86.562 bil or 10.9% compared to RM792.998 bil or 52.4% in 2019, according to the Auditor-General’s (AG) Report 2020.
It said the Government ran a deficit of RM87.64 bil with a deficit to gross domestic product (GDP) ratio of 6.2%, compared to 3.4% or RM51.37 bil in 2019.
The report said 50.4% or RM98.05 bil of the RM194.55 bil of new loans in 2020 was used to finance the principal repayment of matured loans.
Owing to that, it showed that the Government was dependent on new loans to repay matured loans and the use of the development fund amounting to RM8.265 bil for the repayment of private financing initiative liabilities and guarantee commitments.
In long term, the financial burden of the Government will increase for loan repayment and thus provision managing for procurement of supplies and services as well as asset purchases will decrease.
The AG Report 2020 was released yesterday (Oct 28) alongside the Federal Government’s financial statement and the 2020 Federal Ministries and Departments Compliance Auditing Report at the Dewan Rakyat.
Touching on the development fund, the report said it encountered a deficit of RM13.25 bil in 2020. Receipts of development fund amounted to RM62.8 bil which include new loans amounting to RM48.57 bil.
A total of RM8.26 bil or 17% was used to finance Private Financing Initiative Liabilities and guarantee commitments while RM40.3 bil or 83% was for development expenditure.
The report said the development fund financed through loans should be used to finance physical development projects that contribute to the creation of new capital that can enhance the country’s development and have a high multiplier effect to generate economic activity.
“Nevertheless, overall, the federal government’s financial statements showed a true and fair view of the Government’s financial position for FY2020 and its accounting records orderly and up to date,” added the report. – Oct 29, 2021
