KUALA LUMPUR: The Pakatan Harapan (PH) government's claim that the country's national debt stands at over RM1 trillion goes against international government debt tabulating standards set by the International Monetary Fund (IMF).
In a statement by Umno's Strategic Communications Unit today, the party said that this is because the present administration under Prime Minister Tun Dr Mahathir Mohamad is combining government debt of RM686.8 billion and contingent liabilities of RM238 billion.
It pointed out that other countries in the world exclude contingent liabilities, which include lease commitments, when reporting their national debt figures.
"No government in the world includes lease commitments in their national debt reporting. Lease payments are spending items, not debt items.
"If we include them, then we should include all government spending items such as government employees’ salary, pension, subsidies in the national debt figures.
"We are and we had always been following the international standard of reporting our national debt figures. All figures are publicly available in Bank Negara (BNM), Treasury, Accounting General Department and National Audit Department websites," said the statement.
Umno was referring to the reported government debt of RM686.8 billion and contingent liabilities of RM238 billion as of 31st December last year during the Barisan Nasional (BN) administration, which are publicly available at BNM's official website.
Umno noted that Malaysia had always abide by IMF standard of reporting national debt, whereby the country reported both government debt (securities issued by government such as bonds) and contingent liabilities (debt guaranteed by the government) separately.
The party pointed out that this was borne out by the fact that the PH government recently begun describing the RM1 trillion in debt figures as a combination of RM686.8 billion in total debt and RM238 billion in contingent liabilities.
"On top of that now Pakatan Harapan government adds commitments such as lease payments and maintenance fees to the existing government debt and contingent liabilities amounting to RM201.4 billion. And that’s how they arrived to the RM1 trillion debt figures.
"But now, if you look carefully, they are no longer using RM1 trillion debt, but RM1 trillion debt and liabilities. Which is technically right. Government of Malaysia has more than RM1 trillion liabilities, of which RM686.8 billion is in the form of debt securities," it said.
Umno said that rating agencies, the investment community and financial institutions are aware of these figures because they were never hidden in the first place.
It noted that rating agencies held annual meetings with Malaysia's Economic Planning Unit (EPU) and the Ministry of Finance (MOF) to get up-to-date figures.
"During Tun Mahathir’s time, contingent liabilities increased every year and when he left, there’s about RM52.7 billion of it and it was never included in the national debt figures.
"As our economy grows, the government raises more revenue and the government becomes more capable to take up more debt.
"We never defaulted on any of our debt or obligations. It’s not about the amount of debt but what do we do with the debt and the capability to service/repay the debt," it said.