The government does not take into account contingent liabilities such as off-budget borrowing into its debt to GDP ratio as these are not “realised” debt.
Finance Ministry secretary-general Mohd Irwan Serigar Abdullah said that without taking these liabilities into account the federal debt is at a “safe” level.
“We only look at realised debt. Most of the contingent liabilities involves government-linked companies, not private sector borrowings.
“So far we can say we are safe at 55 percent and below,” he told reporters after a post-Budget forum in Kuala Lumpur today.
He also said that the government will “by hook or by crook” keep the debt under the 55 percent threshold.
Last week, lawyer and corporate governance specialist Tommy Thomas raised concern that “hidden debts” in the form of contingent liabilities had caused federal debt to far surpass the 55 percent threshold, hitting 67 percent in December 2011.
Finance Ministry secretary-general Mohd Irwan Serigar Abdullah said that without taking these liabilities into account the federal debt is at a “safe” level.
“We only look at realised debt. Most of the contingent liabilities involves government-linked companies, not private sector borrowings.“So far we can say we are safe at 55 percent and below,” he told reporters after a post-Budget forum in Kuala Lumpur today.
He also said that the government will “by hook or by crook” keep the debt under the 55 percent threshold.
Last week, lawyer and corporate governance specialist Tommy Thomas raised concern that “hidden debts” in the form of contingent liabilities had caused federal debt to far surpass the 55 percent threshold, hitting 67 percent in December 2011.
‘Not a legal requirement’
Meanwhile, Finance Ministry undersecretary of the economic and international division A Sundaran said that the 55 percent of GDP debt threshold “is not a legal requirement” but an administrative fiscal rule observed by the ministry.
He said the legal requirement only involves debt as stipulated under the (Local) Act and Government Funding Act.
“(The amount) is far from the legal rules,” Sundaran said, without stipulating the actual amount.
It is understood that this figure stands at about 40 percent.
Debt to GDP ratio for 2012 is 53.7 percent and is expected to be 54.7 percent in 2013.
On a related matter, Mohd Irwan said that the government is also heeding the International Monetary Fund’s and World Bank’s advice to reduce dependence on oil and gas revenues, via Petronas dividends.
“We have discussed gradually reducing Petronas dividend to the government, but I will not tell you by how much,” he said.
“This is good for Petronas as it mean they can invest more (in its own development).”
The government expects Petronas dividends for 2013 to be RM27 billion.
Meanwhile, Finance Ministry undersecretary of the economic and international division A Sundaran said that the 55 percent of GDP debt threshold “is not a legal requirement” but an administrative fiscal rule observed by the ministry.
He said the legal requirement only involves debt as stipulated under the (Local) Act and Government Funding Act.
“(The amount) is far from the legal rules,” Sundaran said, without stipulating the actual amount.
It is understood that this figure stands at about 40 percent.
Debt to GDP ratio for 2012 is 53.7 percent and is expected to be 54.7 percent in 2013.
On a related matter, Mohd Irwan said that the government is also heeding the International Monetary Fund’s and World Bank’s advice to reduce dependence on oil and gas revenues, via Petronas dividends.
“We have discussed gradually reducing Petronas dividend to the government, but I will not tell you by how much,” he said.
“This is good for Petronas as it mean they can invest more (in its own development).”
The government expects Petronas dividends for 2013 to be RM27 billion.
No comments:
Post a Comment