He said ideally this should be used for development purposes and to create a multiplier effect in generating economic growth.
“Only a small portion, which is 29%, was channelled to the development fund, which is worrying … development expenditure should be used more productively so that the projects we (government) fund gives higher multiplier effect to generate economic growth,” he said at a media conference at the Parliament building today.
He said through development projects, the government could collect taxes which could be used to repay the interest and principal on the loans concerned.
According to him, in 2034 the government is projected to repay RM10 billion for that year alone.
“In 2034, we have to pay back RM10 billion, which means a significant increase … we have to be prepared even though it is still far away, we have to be prepared with economic activities with huge revenue to meet the commitment to repay (the debts),” he said.
Nik Azman said the development allocation for the 2019 financial year was, among others, used to pay the matured debts of 11 government-owned companies in the form of grants.
The companies were DanaInfra Nasional Bhd with an allocation of RM1.5 billion; Suria Strategic Energy Resources Sdn Bhd (RM1 billion); Jambatan Kedua Sdn Bhd (RM0.327 billion); KL International Airport Bhd (RM0.082 billion); TRX City Sdn Bhd (RM0.066 billion); MKD Kencana Sdn Bhd (RM0.05 billion); and SRC International Sdn Bhd (RM0.388 billion).
“The two companies with no development projects were Suria Strategic Energy Resources and SRC International but they were using development allocations,” he said, adding that the allocation should be channelled in the form of loan or advance which have to be repaid.
However, he said the usage of the money was not in violation of Section 8 of the Loan Guarantee Act 1972 but that it did not reflect the real accounting ethics in terms of auditing.
Regarding this, Public Accounts Committee (PAC) chairman Wong Kah Woh said the committee had heard a briefing by the auditor-general on the 2019 Federal Government Financial Statement tabled in Parliament today.
“At the presentation lasting almost three hours, PAC was comprehensively informed on the overall Federal Government Financial Statement ending Dec 31, 2019 to show the actual and accurate financial position of the federal government with its accounting records updated and orderly maintained,” he said.