IT’S TIME perhaps to be cruel to all National Higher Education Fund Corporation (PTPTN) recipients as Malaysia needs to start somewhere to instil in the mind of its younger generation that the country can ill-afford to continue borrowing money to pay off its colossal (yet still growing) debt obligations.
As revealed by the now ‘obsolete’ Budget 2023, the amount of the country’s Federal debt (not including state debts) has spiralled close to the RM1 tril mark – to be precise, RM979.814 bil or 63.4% of the 2021 gross domestic product (GDP).
In addition, RM113.764 bil or 52.4% of the total gross loans obtained in 2021 were used for the principal payment of maturing loans.
Sympathy has its limitation here given lackadaisical enforcement to act against errant PTPTN borrowers who refused to pay up for whatsoever reason has cultivated the mentality that it is fine to borrow and not to pay back simply because it is the government’s money.
“These were low interest loans given to (tertiary) students to pursue higher education with small monthly repayment obligations after they graduated and start working. Some borrowers are said to be earning good pay but did not even make their monthly payments,” lamented lawyer-cum-human rights activist Charles Hector in his latest blog.
“Worse still is that the past governments allowed it and even wanted to reduce loan repayment obligations by means of a discount. Is this a Malaysian culture which is reflected in the country’s increased borrowing?”
“It’s common sense that if we do not have to pay so much for debt repayments, Malaysia will have so much more monies to subsidise basic food items, implement fast flood prevention programmes, etc,” he added.
When tabling the Budget 2023, Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz has announced a 20% discount for full settlement of PTPTN loan; a 15% discount for payment of at least 50% of the total balance in one payment; and 15% discount for those making repayment through monthly salary deduction or scheduled direct debit payments.
The discount incentive will start from Nov 1 this year to April 30, 2023.
Additionally, the Government also announced a PTPTN loan repayment exemption for all students who graduate with a first-class bachelor’s degree, an increase in PTPTN loans, and providing loans for the purchase of laptops to PTPTN borrowers in the M40 group.
Elsewhere, Hector also expressed his dismay that Budget 2023’s projected revenue collection of RM272.6 bil is almost entirely spent on operational expenditure (RM272.3 bil), leaving the development expenditure in the budget to be fully funded by debt.
“The Malaysian PM (Prime Minister) and leaders must accept the reality of our almost RM1 tril debts – and would that also be a reason why the ringgit is falling – not just in reference to US dollar but also to the Singapore dollar, Thai baht, and other Asian economies,” he pointed out.
“Operational expenses-wise, should we not reduce the size of public servants or suspend new recruitment? Should we stop having many ministers and deputy ministers but a small efficient cabinet at best? Maybe, we should limit Cabinet size to 12 ministries.”
Moreover, Hector also proposed the slashing of MP allowances from the current RM16,000 to RM10,000 and instead channel that as allocation for MP supporting staff and maintenance of service centres.
“Also don’t forget to set a maximum monthly pension entitlement. How much pension does (ex-premier Datuk Seri) Najib (Razak) get from Pahang for being the state’s former MB (Menteri Besar) and ADUN (state assemblyman)?” he asked.
“How much pension will he get for being MP and PM until he dies, and thereafter his spouse dies?” – Oct 16, 2022
