Auditor-general worries about borrowings being used to settle debts

KUALA LUMPUR : Auditor-General Datuk Nik Azman Nik Abdul Majid has expressed worries that 59.9% or RM82.723 billion of the federal government New Borrowing Receipts (Terimaan Pinjaman Baharu) for 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.

Auditor-General Datuk Nik Azman Nik Abdul Majid

“Only a small portion which is 29% is channeled into development funds, 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 the Parliament building today.

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

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 financial year 2019 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 Bhd with an allocation of RM1.5 billion; Suria Strategic Energy Resources Sdn Bhd (RM1 billion); Jambatan Kedua Sdn Bhd (RM327 million); KL International Airport Bhd (RM82 million); TRX City Sdn Bhd (RM66 million); MKD Kencana Sdn Bhd (RM50 million); and SRC International Sdn Bhd (RM388 million).

“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, the 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.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s