KUALA LUMPUR – The government has been called out to speed up the process of implementing the Fiscal Responsibility Act as one of its fiscal reforms.
Kangar Member of Parliament, Noor Amin Ahmad, said that with the current operating expenditure rate at almost 100% of tax collection, the government wouldn’t be able to avoid raising debts to accommodate the development expenditure.
“The Ministry of Finance (MoF) has proposed to table the Fiscal Responsibility Bill, so I hope the MoF would not delay and hold discussions quickly in order to table the bill in the Dewan Rakyat,” he told the media in Parliament recently.
He also requested the government to raise the country’s debt ceiling to 70% for he believes the country’s sluggish economic situation is in need of additional stimulus by generating new debts.
Noor Amin said that the MoF’s projected debt ratio of 66% of the gross domestic product (GDP) is above the debt statutory limit approved through an amendment made in 2020. The amendment was created to address the impact of COVID-19 under the Loan (Local) Act 1959 and Government Funding Act 1983.
“The basis of my concern is related to a written reply where it was stated that 43.4% of the government’s debt will mature in five years,” he added.
He further elaborated that the 66% debt ratio projection this year is rather optimistic with the PRIHATIN, PENJANA and PEMERKASA expenditure at the 65%, 57.3% and 38.2% levels, respectively.
“Taking into account the total Budget 2022 allocation of RM 322.1 billion as a benchmark and total revenue collection of about RM234.0 billion, this means that the deficit expenditure is around RM88 billion.
“The introduction of new taxes at a time when the country has not yet fully recovered from the pandemic would further burden the people who were still reeling from the impact of rising prices of goods,” he said
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