Deputy Finance Minister Ahmad Maslan disclosed today that the government debt level as of September 2013 stood at RM529.2 billion.
Ahmad told parliament that of the RM529.2 billion, RM512.3 billion or 96.8% is domestic debt while the remaining RM16.9 billion or 3.2% is external debt.
Just last month the Finance Minstry revealed that the domestic debt stood at RM502.9 billion. This was a climb from its June 2013 figures which was RM519.3 billion.
In explaining the increase, the ministry said the government’s policy was to prioritise domestic loans which have high liquidity, lower borrowing costs and able to minimise foreign exchange risks.
Domestic loans are obtained through the issuance of treasury bills, government investment issues, the government security and loans to housing loan funds.
Holders of such instruments include financial institutions, insurance companies and social security institutions such as the Employees Provident Fund (EPF) and Social Security Organisation (Socso).
On the other hand, the national debt stood at RM284.7 billion or 28.2% of the gross domestic product (GDP).
The national debt is incurred by the state due to loans obtained by the government and private sectors from foreign sources and includes the external debt of the federal government, public non-government enterprises and the private sector.
When asked by Kuala Kangsar MP Wan Mohammad Khairil Anuar Wan Ahmad of ways to raise funds other than implementing the much debated goods and services tax (GST), Ahmad said the removal of subsidies would settle the deficit in one year.
“The deficit can be completed in a year if subsidies are not handed out. Then, there is not need to wait until 2020 (as targeted),” he said.
“However, the welfare of the people is of greater importance,” he added.