Wednesday 21 March 2012

'Don't worry, our debt only 2% short of critical level'

Malaysia’s national debt is not at a critical or worrying level, says Deputy Finance Minister Awang Adek Hussin, despite it being only two percent shy of the constitutionally allowed government borrowing limit.

"It is not at a critical level at the moment. Our limit or threshold is 55 percent of the Gross Domestic Product (GDP), we are now at 53 percent.

"So you don’t have to worry about it," he said during Question Time in the Dewan Rakyat today.

NONEAwang Adek (right) was answering a supplementary question from Saifuddin Nasution (PKR-Machang) on what the government is doing to control the rising government debt.

Saifuddin claimed that the rising trend in national debts will soon lead to the country owing up to 100 percent of its GDP, citing financial records from 2008 onwards that exhibited rising debts year on year.

“We have the threshold at 55 percent, which we shall not pass. If we don’t pass 55 percent then we will never reach 100 percent,” argued Awang Adek, saying that as a responsible government, they will never allow expenditures and borrowings to exceed the set threshold.

The matter of Malaysia’s rising national debt has been opposition fodder in Parliament, with the government moving to deflect such accusations.

‘Subsidy cuts to continue’

Meanwhile, Domestic Trade, Cooperatives and Consumerism Deputy Minister Rohani Abdul Karim told the House today that the government will continue to take away subsidies from the public.

“Subsidy is not a long term solution to the (woes of the rakyat)... subsidy restructuring shall continue to be implemented,” she said in answer to a question from Azan Ismail (PKR-Indera Mahkota) on whether the subsidy cuts will continue.

She explained however, that any projected subsidy cuts however shall take into consideration things such as the cost of living, and other factors that may impact the rakyat’s livelihood, so as not to cause too much of a burden.

Rohani also added that the formation of the KR1M or Kedai Rakyat 1Malaysia cooperative was one government initiative tailored to help reduce the rakyat’s burdens in the face of the rising cost of living.

The government has implemented several cuts on subsidies for essential goods like fuel, electricity and sugar in the last year, citing the lack of revenue to finance the rising cost required to maintain the subsidies in the face of rising global prices.

However, the opposition has blamed empty public coffers caused by a spendthrift government as the cause.

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