Malaysia’s federal liability rises to RM1.19 tril

KUALA LUMPUR – Cooperation from all levels – including at the responsibility centre and department, as well as continuous monitoring that is effective at the ministerial level – are needed to ensure that financial discipline can be implemented.

The Auditor-General’s (AG) Report 2020 is of the view that the preparation of a clear work procedure, understanding and compliance with financial regulations, as well as close supervision of the duties of officers, will create a work culture and practices that are of quality and with integrity.

According to the report released today, federal liability in 2020 – which comprised federal debt and financial liabilities – increased 9.9% to RM1.19 trillion compared with RM1.08 trillion in 2019.

“The ratio of federal liability to gross domestic product is at 83.8% in 2020, higher than 71.3% in 2019,” it said.

Thus, the Audit Department has proposed to the government to improve the expenditure management discipline, empower efforts to generate revenue, and monitor its commitment on loan repayments.

“This step is important so that surplus revenue can be enhanced to fund development expenditure, hence reducing the dependency on new loans,” the report said.

The Audit Department also proposed to set a consistent policy in accounting for the premium and discount from the issuance of government debt security, as well as ensuring that the development fund is utilised for projects and programmes that have high multiplier effects on the nation’s economic activities.

The ceiling on debt guarantees made by statutory bodies and companies must also be set to avoid additional burden commitments to the government if they are faced with difficulties in fulfilling their obligations.

In 2020, federal debt – which comprised domestic and foreign loans – increased 10.9% to RM879.56 billion compared with RM792.99 billion in 2019. – Bernama, October 28, 2021