‘Painful fiscal steps needed’


  • Nation
  • Thursday, 14 Jun 2018

One for the album: Lim (in white shirt) with his wife Betty together with Puan Sri Tan Bee Hong and husband Lee (in green shirt) at the Hari Raya function in Seri Kembangan.

SERI KEMBANGAN: The Govern­ment has to undertake some necessary fiscal measures that might create some difficulties for the people to address the country’s debts, says Lim Guan Eng.

The Finance Minister said the Pakatan Harapan administration was serious about maintaining fiscal discipline and measures have to be taken to ensure the budget deficit level remains at 2.8% of the gross domestic product.

“We would continue to convince the capital market that we are serious about addressing the RM1 trillion debt problem.

“I think we have shown how we are going to address our debt level by reviewing many of the infrastructure projects,” he told reporters after handing out Hari Raya goodies to the less fortunate here yesterday.

Commenting on Moody’s Investors Service assessment on Malaysia’s debts, Lim said the impact was there because sources of revenue such as the Goods and Services Tax (GST) were taken away but it will be replaced with Sales and Services Tax.

“But they (Moody’s) also mentioned that by removing the GST, you’ll encourage consumption and with an increase in consum­ption, it will help to spur our nation’s economy.

“So I think you have a direct impact that goes both ways,” he said.

Lim also rebutted former premier Datuk Seri Najib Tun Razak’s claim that the debt level is not at RM1.087tril.

“We have never denied that the direct Government debt is at RM687bil. But when you talk about Government guarantees, which have become direct Government debts, that should also be taken into account.

“The Government debt is at that level because we want to include those contingent liabilities which have now become direct debts,” said Lim.

For example, he said the Government liability for 1Malaysia Development Bhd (1MDB) is in the form of guaranteeing its loans and since 1MDB is insolvent, the Government would have to pay.

During the event organised by Country Heights Holdings Bhd, Lim presented 1,000 goodie bags to 844 families and 156 students from orphanages.

Also present were Country Heights Holding founder Tan Sri Lee Kim Yew and Lim’s wife Betty Chew.

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