PETALING JAYA: DAP’s Tony Pua has dismissed Treasury Secretary-General Mohd Irwan Siregar Abdullah’s explanation over the issue of the large deficit among the government’s Non-Financial Public Corporations (NFPC), which included 29 government-linked companies (GLC).
On Monday, Irwan said GLCs like Petronas and Khazanah made huge investments, adding that there were profit-making entities, like Tenaga Nasional and Telekom, besides the Mass Rapid Transit (MRT) and Light Rail Transit (LRT) extension projects currently under way.
“So, how is it a time bomb. Money invested for the MRT will pay off when people buy tickets. Such GLCs will then be able to repay their own loans,” Irwan said in response to Pua’s comments last Friday, following Prime Minister Najib Razak’s Budget 2017 speech.
“The Treasury Secretary-General is being extremely disingenuous by citing only the big public listed companies as examples.
“Out of the list of 29 companies, there are companies which are generally well-managed and would have no problems servicing their financial obligations, such as Axiata and Petronas.
“However, there are many other entities among the 29 which are nothing other than vehicles for Government expenditure which more likely than not, will never generate sufficient income to service their loan obligations,” the Petaling Jaya Utara MP said adding that the list of 29 NFPCs isn’t even conclusive.
Pua had on Friday released a statement forecasting a potential financial disaster which had been “creatively hidden” from Najib’s speech.
He said the NFPCs had experienced a rise in spending deficit from RM10.6 billion in 2013 to RM52.3 billion (2014) and RM56.9 billion (2015), calling it “the biggest time bomb to Malaysian public finances”.
However, he said, Putrajaya’s debt service charges had gone up from RM20.3 billion in 2013 to an expected RM28.9 billion in 2017.
Pua, who is DAP National Publicity Secretary, chided Irwan for not including MRT Co’s total RM48 billion expected investment and projected cost for two major ongoing and planned projects.
“This is financed almost-entirely by debt which is never likely to be repaid without future Government support.
“He (Irwan) also left out Prasarana’s RM13 billion debt and mounting expenses that have only increased and requires annual Government grants to keep the company afloat?” Pua said, listing out other critically-ill GLCs – KTMB, Malaysia Airlines, Penerbangan Malaysia, Silterra Malaysia and Syarikat Perumahan Negara.
Pua also accused the government of leaving out key Government-owned enterprises from the list of 29 NFPCs.
“These enterprises heavily commit the Federal government to meeting their obligations for many years to come, such as PFI Sdn Bhd which took a RM30 billion loan from EPF to carry out general public infrastructure works, Pembinaan BLT with a RM10 billion debt to build police stations nationwise, and of course more recently controversial companies such as 1MDB and SRC International.”
Pua also said that the Economic Report 2016/2017 also shows the NFPC deficit, which was a modest RM10.6 billion deficit in 2013, had grown to RM52.3 billion in 2014 and further increased to RM56.9 billion in 2015.
“The estimated deficit for 2016 is currently RM50.5 billion. That effectively means, government-owned enterprises are having much larger deficits than the Federal government itself.
“The Federal Government budget deficits for 2015 was RM37.2 billion. In 2016, it is estimated to hit RM38.7 billion while the Government forecast RM40.3 billion for 2017.”
Pua called for Irwan to stop creative accounting with the country’s national budget in order to manipulate the perception towards the Government’s financial position.
“Such actions will only bring short term benefits but bring long-term pain, reminiscent of the Greek-type government spending which ultimately brought collapse to the country.”