December 1, 2023

New Malaysia Times

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Auditor General worries over borrowings being used to settle debts

auditor general

KUALA LUMPUR, Nov 5 — The Auditor General Datuk Nik Azman Nik Abdul Majid has expressed worries that 59.9 per cent or RM82.723 billion of the federal government New Borrowing Receipts (Terimaan Pinjaman Baharu) for the financial year 2019 is used to settle debts.

He said ideally, it should be used for development purposes and to create the multiplier effect in generating the economy.

“Only a small portion which is 29 percent is channeled to the development fund, which is worrying…development expenditure should be used more productively so that the projects we (government) fund gives higher multiplier effect to generate the economy and at the same time have value for money,” he said at a media conference at Parliament building today.

He said through development projects, the government could collect taxes which could repay the interest and principal of the loans concerned.

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According to him, in 2034 the government is projected to repay RM10 billion for that year alone.

“In 2034, we have to pay back RM10 billion, which means a significant increase …we have to be prepared even though it is still far away (2034) , we have to be prepared with economic activities with huge revenue to meet the commitment to repay (debts),” he said.

Commenting further,  Nik Azman said the development allocation for the 2019 financial year among others was used to pay the matured debts of 11 government-owned companies in the form of grants.

The companies involved are DanaInfra Nasional Berhad with an allocation of RM1.5 billion; Suria Strategic Energy Resources Sdn Bhd (RM1 billion); Jambatan Kedua Sdn Bhd (RM0.327 billion); K.L International Airport Bhd (RM0.082 billion); TRX City Sdn Bhd (RM0.066 billion); MKD Kencana Sdn Bhd (RM0.05 billion); SRC International Sdn Bhd (RM0.388 billion).

“The two companies with no development projects are Suria Strategic Energy Resources and SRC International but they are using development allocation,” he said, adding that the allocation should be channeled in the form loan or advance which have to be repaid.

However, he said the usage of the money is not violating Section 8 of the Loan Guarantee Act 1972 but it did not the reflect the real accounting ethics in terms of auditing.

In this regard, Public Accounts Committee (PAC) chairman, Wong Kah Woh said the committee had heard a briefing by the Auditor General on the 2019 Federal Government Financial Statement tabled in Parliament today.

“At the presentation lasting almost three hours, PAC was comprehensively informed on the overall  Federal Government Financial Statement ending Dec 31 2019 to show the actual and accurate financial position of the federal government with its accounting records updated and orderly maintained,” he said.