Friday, June 22, 2018

How to lose revenue & blame debt for failing manifesto promises

Malaysiakini - Is debt why Harapan can’t fulfil election promises? by Gunasegaram (extracts):

The simple answer to that question is no! 

Pakatan Harapan cannot fulfil their promises because they promised too much in too short a time. They have lost a huge amount of revenue because of the implementation of one promise - the effective abolition of the goods and services tax or GST. That is the main cause of their problems now, not debt.

Almost all of their manifesto promises are good and much of them do not need money to be implemented but could raise bucketfuls of cash in the future especially if measures proposed for proper governance, tender processes, procurement cutbacks and reducing wastage are implemented.

But the issue of debt has been very conveniently used as a scapegoat for postponing some of the election promises by classifying other items as debts and pretending that these were not in the public domain before. That’s not nice, to say the least.
If indeed debt is the problem, then it is incumbent upon the Harapan government to clearly show how this is so and how the repayment of debt, contingent liabilities and others have impacted revenue and by precisely how much. Only then is it possible to blame debt.

Instead, Finance Minister Lim Guan Eng has taken it upon himself to redefine debt to include contingent liabilities and obligations under private-public partnerships as federal government debt to increase the figure to over RM1 trillion which is not the internationally accepted definition of debt. The federal government debt is still RM687 billion, as Lim himself conceded later.

That caused some amount of confusion in the marketplace which assumed for a while that Lim was implying that the government debt figures were unreliable. However, it did not take long for the marketplace to figure out that much of the information was already in the public domain.

True, you have to take into account the contingent liabilities, which include government guarantees and you have to take into account the kind of public-private partnerships. But for the latter, you have to take into account the capital costs of the project, which Lim revealed was RM63 billion, instead of the RM201 billion which is the sum of all lease and rental payments over the period of the partnership.

If at all there is a revenue shortfall in government, it is because the government zero-rated the GST so that no one pays this tax anymore. On top of that, there is a tax holiday of three months from June 1 where even the reinstatement of the old sales and services tax or SST won’t take place, which will lose even more revenue.


  1. lge is the smartest fm we ever have, even if his truth eventually proved to be untrue, half true or simply lie, he would just claim it is instructions from pm.

    mahathir shd feed lge more shit since all he can do is eat shit.

    1. The ACCA should have pulled his membership away (if he had one) for bringing disgrace to the accountancy peerage of Malaysia. Imagine promoting oneself as having accounting background but clueless in the accounting definition of debts & liabilities.

      The Malaysian accounting circles would be a laughing stock to the world. A whole country with tens of thousands of certified accountants but having a failure in Maths as the Finance Minister.

      He has the capability to come out of a negotiation smirking but loosing in the deal!

    2. Both the Malaysian Government and the Accounting profession need to get real about this Bullshit about Contingent Liabilities.

      They have been pulling wool over the eyes of the Malaysian public for years.

      The accounting treatment has been heavily abused as far as the Malaysian Government is concerned.

      A correct Contingent Liability is money that you MAY (unsure) need to pay IF certain circumstances (hence the word Contingency) become true, but at the moment is not known or unsure.

      E.g. You stood as financial guarantor for your wife's business loan. If the business prospers, you wouldn't actually end up paying a sen.
      On the other hand if the business goes bust, or your wife elopes with her new boyfriend, you would be left with the burden of repaying the loan.

      Money that you are SURE of having to repay, rain or shine, is a DEBT.

      1MDB is Not a Contingent Liability. Maybe it was in the beginning. But today, the Government is SURE of having to pay back its debts, so it is a rightly considered a DEBT, not a Contingent Liability.

      The Private-Public Finance Initiatives are legally 100% certain liable to be paid by the Government, rain or shine.

      There is no Contingent UNCERTAINTY involved. It is NOT a Contingent Liability.
      Neither Is it merely an operating expense. The Government is Unconditionally liable to pay xxx Millions for xx years into the future. It is just like a Hire Purchase DEBT, like if you bought a car using Hire Purchase.

      If I Rent a Building, the rental is an expense. If I stop renting it , there is no more expense. That is why it can be treated as an expense.

      An employee's salary is an expense. If he stops working, or he gets fired, there is no more salary paid. That is an expense.

    3. Kalau kena bayar itu hutang-lah.

      Najib does not understand the concept of contingency. That's why he did not have a contingency plan in case he lost GE14. Bila kalah baru cepat-cepat cari jamban nak lau sai.

    4. Monsterball spins a nice yarn on accounting definition but he forgot one crucial element, 1MDB debts are backed by assets. And to repay back the loan, it needs to monetise the asset. The loan only becomes a debt when the asset monetisation isn't enough to cover the loan sum, which isn't the case for 1MDB. As LGE have put it today, 1MDB have the capacity to pay of the pending Rm3 Billion repayment due and still make a healthy profit from its remaining landbank holds.

      That's why World Bank, IMF, Moody's and others can accept that 1MDB is defined as Contingent Liability. As long the contingent loan repayment is made with its own assets & cash, its not a debt but a liability until all the loan terms are repaid.

    5. A Contingency in plain English means circumstances/ conditions which are not certain to occur.

      That is also the legal + World Bank definition.

      Once actual debt payments have to be made by the Government , as they have for 1MDB, it is a real Debt, not a Contingent Liability.

      TRX is not 1MDB.
      TRX is a property development, and it can eventually pull through, but with additional Government funding. I'm still sore about that, but Lim Guan Eng is a smart Minister.

      1MDB itself is bankrupt, by Arul Kanda's own admission.
      Nothing monetisable. "Monetising" in plain English means converting into Cash.

      The "units" held in Falcon Bank Singapore , which doesn't exist any more, were worthless.
      The SRC Coal Mine in Mongolia doesn't actually exist.

      The Finance Minister II at the time Datuk Seri Husni Hanadzlah lied to Parliament.

      A big bunch of crooks.

    6. Monsterball is a fool. 1MDB was TRX and TRX was 1MDB!
      Without 1MDB, there's no TRX or Bandar Malaysia. The reason why 1MDB is seen as bankrupt was because all of its assets are re-purposed by MoF into another vehicle MoF Inc, which is then monetised to re-pay back the loans taken under the 1MDB name. Simple left pocket goes right pocket which goes to pay the loan.

      The only crook is your lying Finance Minister, or just a clueless one, who can't seem to put 2 and 2 together but came spinning a yarn of his own which you ate like its some spaghetti.

  2. Kaytee can always present himself as potential finance minister successor. Must show himself one you know

  3. Najib is so naive, even after 40 years in politics. So green. In politics when you promise, promise BIG. Bigger and better than your opponent. Macam main poker-lah.

    But what did he do? He promised smaller.

    When Harapan promise hapus GST, he promise no tax for those below 26 years of age. When Harapan promise abolish toll, he promise no toll, but for 5 days only. When Wile E Coyote promised 2 days holiday if Harapan wins, only one week later he responded, with the same. That was the best he could do, the night before polling. Now look where he is. Padan muka.

    1. As a person, you don't try to make promises you can't keep. Look at PH, now struggling to fulfill all their promises and even have to sheepishly postponed or backtrack most of them.

    2. That's why prior to the GE, many here at the comment section were saying...we need the bigger devil to fight the current devil. We need Dr M to fight Jibby in order to have even a chance to win. And what is the end result...PH menang lah, hihihihi. Now what is Jibby saying...Oh, Dr M pandai, he knows the system, he knows the civil servants, he knows the in and out...wakakakka. Sekarang baru nak admit, but before he lost the crown, he was saying Old Man sudah senile, Old Man doesn't know what he is saying....wakakakka. Music to our ears. We are waiting for the orchestra when he and wifey go to jail.

    3. I don't care if he goes to jail. He's not someone from PAS, so what do I care. But he must go for the right reason not like what you folks did to Anwar. Otherwise, Mahathir has never change his character one bit but the one changed is your folks foolishness to trust him.

  4. "Instead, Finance Minister Lim Guan Eng has taken it upon himself to redefine debt to include contingent liabilities and obligations under private-public partnerships as federal government debt to increase the figure to over RM1 trillion which is not the internationally accepted definition of debt."

    Debts & liabilities r IOU that must be settled when they r due!

    No amount of numbers acrobat CAN reduce them in anyway, though for a short period of time, the figure dressings make them look pleasing!

    Cinapek knows deep in their heart - this very basic conduct of business. The blur-sotongs DONT. Hence the disparity in business acumen!

    Contingent liabilities and obligations under private-public partnerships become federal government debts WHEN these IOU have clearly been known to be unable to generate enough incomes (not even profits!) to sustain themselves.

    By twisting the phrase of "the internationally accepted definition of debt" vis-a-vis contingent liabilities and obligations under private-public partnerships as federal government debts, u ignore about the unmentioned fine prints about the assumed viability of these contingent liabilities and obligations under private-public partnerships.

    If they r self-sustain in income/profit generating then yr international accepted definition applies. Otherwise, they r debts, that r like slowly inflated balloons, that r going to burst.

    Ignoring such a glaring fact IS not financially prudent!

    But what do blur-sotongs & lies provocateurs care!

    1. author of article Gunasegaram is a pro Pakatan journalist

    2. So what?

      This is new M'sia!

      Even experienced & knowledgeable writers make glaring mistakes.

    3. can't accept the TRUTH from an expert, wakakaka

    4. so mr cant kapish, if the debt is 1t, any idea what lge going to do with it?

    5. Again....tell us your prowness by being upfront lei

      Show us your cheebye fucking name, ic, photo, doxuments and credentiala

      Got fucking cojones or not.....cheebye kaytee

      Else whatever u says are lies

    6. Wakakakaka…

      TRUTH from an expert?

      Can u double check with guna!

      This is not a tart game. Shit tarts DONT count.

    7. Bloody bat!

      Since debts r #1, hence their clear definition/classification MUST be identified.

      Ain't these what yr pet hate has done?

      Or u r not only blind but choose to be blur too!

    8. halo bodoh, enough propaganda n strawman, reread the title of tis article, then try to answer my pretty straight-forward question okay?

    9. What fucking expert.....cheebye kaytee? Like that also can be expert....i suggest cheebye motherfucker kaytee go apply goldman sach without showing your face.....

      You can keep your 3"dick kaytee....pauline hanson may wanna sodomise it

    10. Playing wordsmithy semantics er?

      Wakakakaka… u write more & more like kt! Perhaps, kt ver 2.0.

      Mana tu main propaganda n strawman?


      Haven't I answered yr pretty straight-forward question?

      Or u kena infested with reading deficiency syndrome too!

      Tsk… tsk… too much pkr jamban works, maybe?