Tony Pua says guarantees are also debts

(MMO) – A Ministry of Finance special officer said today Datuk Seri Najib Razak was “obviously trying to be disingenuous with words” when the latter insisted that he was telling the truth about the country’s debt.

DAP leader Tony Pua scoffed at Najib’s assertion that he had been vindicated when the ministry stated that the official government debt was only RM686 billion, and responded by claiming the former prime minister had abused his power to circumvent contingent liabilities from being showing in the balance sheet.

Pua, MP for Damansara, then said the polemic over the definition was redundant, asserting “a debt in any other name stink just as bad”.

“The former Prime Minister was obviously trying to be disingenuous with words,” the DAP leader said in a statement issued this evening.

“The very reason why we referred to the ‘official’ federal government debt, is precisely because the ‘official’ figure used by the past Najib administration failed to take into account the true debt obligations by the Federal Government.

“For example, government guarantees for Ministry of Finance (MoF) subsidiaries have been abused by the former Government to circumvent the ‘official’ classification as Federal Government debt.”

Najib has insisted that his government had reported the national debt according to international guidelines and never attempted to hide the numbers, and claimed the Pakatan Harapan (PH) administration were spooking investors by blowing the up the debt issue.

In a statement posted on his Facebook page, Najib said contingent liabilities were excluded in government debt figures even during Prime Minister Tun Dr Mahathir Mohamad’s tenure then.

But Pua in his reply said regardless of the official definition, taxpayers money will still be used to service government-guaranteed debts if state funds fail to meet their obligations.

“In the end, entities which are not able to service their federal government guaranteed debt would still require the federal government to step in to meet their obligations,” Pua said.

“Is Najib telling Malaysians that just because the Federal Government is servicing these debts as a guarantor, they are not Federal Government debts??

“Would not a rose by any other name, smell just as sweet? Or more appropriately, a debt in any other name stink just as bad?” the Damansara MP continued.

On Thursday, Finance Minister Lim Guan Eng said the current government had decided to call “a spade a spade” in publicly claiming that the liabilities of the government stand at over RM1 trillion, or 80.3 per cent of the GDP.

Lim said that the total amount was an accumulation of off-balance sheet items such as contingent liabilities and lease payments committed by the government under Public Private Partnership (PPP) projects.

Contingent liabilities amounted to just under RM300 billion, the MoF said.

Pua noted that the finance minister had specifically highlighted the “committed” government guarantees, citing the RM42.2 billion Danainfra Nasional used for the construction of the MRT and the approximate RM38 billion for 1MDB as liabilities.

The MoF also revealed that it has been secretly servicing some RM7 billion or more of 1MDB’s debts to date, which Pua said should already be considered as Federal Government debt.

“Or is Najib trying to tell the new Harapan government that we should continue pretending that these are not our debts?”