In the Auditor-General’s (AG) Report 2020, it is revealed that Malaysia’s federal liability in 2020, which comprised of federal debt and financial liabilities, had increased by a whooping 9.9% to RM1.187 trillion, as compared to RM1.080 trillion in 2019.
According to Bernama, the Audit Department has called for the cooperation from all levels including at the Responsibility Centre and Department to continuous monitor the implementation of financial discipline at the ministerial level.
Meanwhile, the report also said that the preparation of a clear work procedure, understanding and compliance with financial regulations, as well as close supervision of the duties of officers that is necessary to create a work culture and practices that are of quality and with integrity.
“The ratio of federal liability to gross domestic product (GDP) was at 83.8% in 2020, higher than the 71.3% in 2019.” the report said.
To prevent the situation from worsening, the Audit Department has proposed that the government should improve on expenditure management discipline, empower efforts to generate revenue, and monitor its commitment on loan repayment.
“This step is important so that surplus revenue can be enhanced to fund development expenditure, hence reduce the dependency on new loans.” the report said.
Meanwhile, the Audit Department also proposed to the government to set a consistent policy in accounting for the premium and discount from the issuance of Government Debt Security.
In addition, the department had called for the government to ensure that its development funds is only utilised for projects and programmes that have high multiplier effects on the nation’s economic activities.
They also said that a ceiling on debt guarantees must be made on statutory bodies and companies to avoid additional burden commitment to the government if the statutory bodies and companies face difficulties in fulfilling their obligations.
In 2020, the federal debt which comprised of both domestic and foreign loans increased 10.9% to RM879.56 billion compared with RM792.99 billion in 2019.
What do you think about this? Share your thoughts!