Thursday, May 31, 2018

Official debt figure is RM648 billion, not RM1 trillion

MM Online - Malaysians raise over RM7m for Tabung Harapan in under 24 hours:


Just imagine, RM7 million within 24 hours.

In one year, assuming each and everyday the public contributes RM7 million, the Tabung will get 7 x 365 = 2.555 Billion, say 2.6 Billion rounded up.

That means Malaysia will solve its RM1 Trillion debt in 385 years (assuming for simplicity sake, the interests remain at zero).

Large donations like RM1 million from Lim Guan Eng's standby bail money will help tremendously. After all, Lim is unlikely to face charges or temporary incarceration thus the bail money, donated by the public, is not longer needed by Lim Guan Eng, thanks in large part to his father who recently told the AG to resign voluntarily.

OTOH, if the national debt is around 650 Billion, then it will be faster.

P Gunasegaram, a pro Pakatan journalist at Malaysiakini wrote Is our debt really over RM1 Trillion? (extracts):


Lim should know that this is not included when the ratio is calculated in international debt figures. But, yes, government guarantees and contingent liabilities should be taken into account in assessing the overall debt picture correctly.

The next one that Lim includes is lease payments under public-private partnerships (PPP) of RM201.4 billion. But is this fair?

Here’s what Lim says: “However, in addition to the above, the federal government is also committed and obligated to make lease payments (including rental, maintenance and other charges), for a whole list of ‘Public-Private Partnership’ (PPP) projects such as the construction of schools, hostels, roads, police stations, hospitals, et cetera.

“The lease commitments which were designed specifically to circumvent the federal government guarantee and debt limits amount to RM201.4 billion (14.9 percent of GDP).’

This does not seem to be in the public domain. I tried looking for the official figures in the Accountant-General’s 2016 report but could not locate them. Yes, there are indications that this may have been on very favourable terms to those who obtained them but it is a legitimate means of reducing the government’s balance sheet practised now in many countries around the world.

Essentially under these arrangements, the private sector undertakes a project, for example, constructing a government office. In return, the government commits to paying rent for, say, 20 to 30 years. While borrowings reduce, as a result, the government’s operating expenditure rises.

Even if including PPP as debt is considered to be the right approach, it will be inaccurate to take into account the full repayments as debt obligations, as payments are made over long periods and include interest charges. Instead, it should be the capital expenditure incurred if the government has to undertake the projects. Damansara member of parliament Tony Pua, who seems to be assisting Lim in these matters, puts PPPs entered into by the previous government at around RM63 billion in value.

There is no denying that PPPs can be problematic. A problem arises if the private sector investors get too high a return, and the government suffers as a result. PPPs will not be classified as debt under most classifications. But, yes both guarantees and PPPs should be taken into account in the overall assessment of the debt and liabilities situation of the government.

No, the official debt figure is still RM648 billion, not RM1 trillion.


I like to think Guan Eng knows his accounts and that he was just bodek-ing his new boss in saying the national debt is RM1 Trillion, when it is RM648 Billion.


29 comments:

  1. As the nation is now in a drip mode financial situation, the following have to be postponed:

    [– Targeted petrol subsidy for cars under 1,300cc and motorcycles under 125cc;

    – Employees Provident Fund contributions for housewives

    – Raising the minimum wage

    – Delaying the repayment period for National Higher Education Fund Corporation (PTPTN) loans for graduates earning RM4,000 and below a month

    – Expanding the Selangor government’s Skim Peduli Sihat nationwide, which offers RM500 basic treatment at registered private clinics for B40 households

    Finance Minister Lim Guan Eng said the initiatives will only be carried out by the Federal government once the country’s financial situation improves.

    “As much as the government wants to carry out all these in 100 days, the government has a fiscal responsibility and will not repeat the mistakes of the previous government by creating financial problems which will lead the country to bankruptcy if not contained.

    “The government remains committed to fulfilling the manifesto pledges once the financial situation permits.

    “If the nation’s financial situation improves in100 days, we will carry out (the initiatives) but if not, we will wait until it improves,” he told a press conference at the Finance Ministry.]

    ReplyDelete
    Replies
    1. You manage your own state la? Hadi awang screwed big time during his fucking tenure as mb. Terengganu folks kicked hadi groin in 2004 ge

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    2. And they loved him back in last GE. So what are you trying to say? That Penangites too, once kicked LKS in the groin during 1999 GE and now loved him back, so must mean LKS screwed big time?

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    3. Yeah....john because herd mentality at the spur moment by kelantanese and terengganu lang. Try next election. Die die pas will lose everything and finally mampus

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    4. And what's the difference to the herd mentality by Penangites onto LKS & DAP? Talk is cheap and promises are cheaper, but Kelates & Tganus aren't taken by your master's forked tongue. PAS have said next will target Perlis and Kedah. Your aneh PM will be isolated on his little island.

      Delete
  2. Sir, Its 385 days, not years! Typing error!

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  3. So, sorry! you are talking about 1 Trillion! So, its 385 years! Please disregard all my comments! Thanks!

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  4. i dun know the point of contention, to me, both 648b n 1t is correct.

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  5. The entire country can manage to donate 7 x 365 = 2.6 billion in a year.

    But if only one man had kept the 2.6 billion donated to his bank account instead of returning it Malaysia can settle the 1T in 384 years instead of 385.

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  6. Najib should give TDM the phone number of that elusive Arab prince. We could do with a large donation now. Or donate that 114 million.

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  7. How much would a bail bond for the world’s biggest kleptocrat be? Would that person need to crowdfund to raise the money ?

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  8. Najib insisted the HSR project was no more than 72B. LGE then explained to the former Finance Minister the principle of interest in accounting. After interest, which we do have to pay, it comes out to 100B.

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  9. By the same principle 648B with interest comes out to 1T.

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  10. Both the PM and the FM were correct in disclosing to their most important shareholders, the People of Malaysia , the true extent of the legally binding financial liabilities that Malaysia faces.

    It is RM 1 Trillion , because that is What We , our Children and grandchildren will be paying.

    It is NOT RM648 billion.

    If we only manage to pay RM 648 Billion , THEN we will someday face a National Default, like Argentina and Greece.
    If we get to that point the Ringgit will be usable only as toilet paper.

    Enough Accounting Hide and Seek.

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    Replies
    1. If you take a house loan, do you consider it as a debt or a liability?

      Get things clear, all debts are liabilities but not all liabilities are debts. Your house loan is not considered as debt but liability, as long you continue to pay. And even if you abrogate to pay, the debts can be catagorised as healthy debt or bad debt. If the house auction price is positive the remaining loan, then its healthy. Otherwise if its below the loan amount then its bad debt.

      So far, Official Debt at RM 687Billion (what LGE said, not me) to GDP is at 51% and liabilities are long term, much of it tied to their holdings onto Prasarana (owner & operator of MRT1 & 2, LRT1 & 2, Monorel, RapidKL buses, RapidPenang buses, RapidPenang ferries, RapidKuantan buses, etc).

      These are rakyat initiatives which aren't intented to be profitable in short-medium term (some would say public transports should never be profitable otherwise its just sucking the users).

      Another liability happens to be due to Mahathir's legacy, Govco, which was setup to rescue Proton's debt situation. As the founder of Proton which culminated in the previous Government having to bear Proton via Govco, can Mahathir take responsibility and pay off Govco's liabilities from his vast sum of money?

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  11. Liability is liability, no matter what u call it. It's the money u owned & need to repay.

    Creative accounting based on international standards (anmokauxai interpretations) &/or whatsoever label u make, DONT hide this fact!

    Normally, one ONLY employs such confusing scheme when one intends to cheat.

    Such operation will no last!

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    Replies
    1. Don't insult the bananas because kaytee is worse than a banana lang

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    2. Here's something to educate yourself
      https://thecoverage.my/news/rm1-trillion-national-debt-propaganda-figure-exactly-whole-world-measures-debt/

      "It’s a convenient way to blame someone while they are down and a convenient excuse to use if they themselves cannot deliver.

      One stone, two birds. The economy be damned as long it is a good political move for them."

      Delete
  12. https://www.thestar.com.my/news/nation/2018/05/31/massive-dubai-like-reclamation-project-planned-for-langkawi-by-bakun-dams-ting/

    ReplyDelete

  13. Again......its all about defending his master najib at all cost......cheebye kaytee.

    And if its najib is the mastermind behind the death of teoh beng hock, kaytee would deny it.

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  14. Congrats Malaysians. You just made LGE an 8 million Ringgit man. Now he certainly can afford for a bungalow with swimming pool and hence his bungalow scandal no longer has locus standi. Don't ask him how he will spend the money because he can't rely on his calculation skills, even if his life depends on it.

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  15. Just to give a perspective of how long 385 years is, well 385 years ago, ie in 1633, the Portuguese were still ruling Malacca, the United States was not yet in existence and the Bugis people of Sulawesi had not yet intruded Malaya. That's how long it will take Malaysians to pay off the 1T debt and liabilities that the BN government has accumulated for us. Meanwhile the fleet of luxury cars in the basement of the Pavilion which were missed by King Sinngh, possibly more "wedding gifts", have not been valued yet. That might shorten the payback time by a couple of days.

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  16. Methink, the crowdfunding exercise is just a PR exercise in promoting patriotism among Malaysians and uniting Malaysians once again, after a bruising and bloody election battle with so much racial and religious mud being said and thrown at each other.

    The amount collected will not significantly reduce the national debt whether it is RM 600+ or RM 1000+ billions according to whosoever wish to believe.

    The Rakyat are already squeezed before and after GE14, more so among the B40 and the 7 million plus households receiving the BR1M (new name BSR)and it's quite obvious the amount collected from the Rakyat would be small unless all corporations, companies, business entities, civil societies, NGOs, religious bodies also chipping in.

    A more effective method would be to sell or flog off Govt. assets be they land, properties, companies, rights, licenses etc.

    Closing down of those ineffective depts or reducing wastages, leakages or downsizing personnel are just to stop the bleeding of current Govt. expenditures which is already humongous comparatively to population size. It does not reduce the overall debts in the short term.

    Govt. Assets belong to all Malaysians and not to any particular race or religion or tribes or persons and should be the obvious solution and palpable to all Malaysians in reducing the overall debt of the Nation significantly by several hundred billions easily.

    That I believe will be the PH Govt. headed by TDM next significant move in boosting back the financial status and fulfilling their PH manifestos promises to the Rakyat.

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  17. Stop issuance of APs to cronies immediately. The relevant Ministry sell the APs and give all proceeds to Treasury.

    ReplyDelete
    Replies
    1. Former AP Queen wants her old job back. Or at least its perks without actually working.

      Delete
  18. Let's be clear. China's interest in Malaysia is not the HSR, ECRL, Bandar Malaysia, any sea port, Iskandar, Musang King durians etc. What they really want is Malaysia to accede to their territorial claim over the South China Sea. If we allow them to build all these projects (esp with money borrowed from them) we will be in no position to offer any resistance to their territorial claim. These "investments" are handcuffs.

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  19. Ting's multi-billion project: Analyst rues shades of yesteryear crony capitalism
    http://www.freemalaysiatoday.com/category/nation/2018/06/01/ting-pek-khiing-once-again-making-waves/

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  20. https://mocsarawak.wordpress.com/2010/10/28/anwar-lodges-police-report-over-bakun-dam-corruption/

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  21. http://anotherbrickinwall.blogspot.com/2018/05/goebbel-esque-rm1-trillion-national.html

    ReplyDelete