A NEW law will be tabled in Parliament to better regulate the nation’s finances and debts, says Datuk Seri Ahmad Maslan.
This comes in light of moves by the government to manage the nation’s mounting debts, which currently stands at about RM1.5 trillion.
“The Fiscal Responsibility Act will be tabled before the end of this year.
“Among the components under the proposed law is that the government cannot incur debts for its operating expenditure.
“The funds (for this) must come from government revenue,” the Deputy Finance Minister said at a press conference in Parliament yesterday.
Under the FRA, he said the government will only be allowed to rely on borrowings for its development expenditure.
“We are also looking at capping the Federal Government statutory debt at 65% of gross domestic product (GDP).
“This is because the government had previously raised the statutory debt limit twice from 55% to 60% of GDP during the Covid-19 pandemic crisis, and raised it again to 65% last year,” he added.
The Pontian MP also said the new law will ensure that debt service charges do not exceed 15% of the nation’s annual budget.
“Previously, the debt service charges used to be between 9% and 11%, but this has risen to between 14% and 15%,” he said.
He added that managing the debt service charges is crucial to ensure that more money can used for development projects rather than merely paying interest on debts.
Last Tuesday, Prime Minister Datuk Seri Anwar Ibrahim informed Parliament that government liabilities and debts stood at almost RM1.5 trillion or 82% of the GDP.
Anwar, who is also Finance Minister, said the debts comprised RM107.9bil of government debts, RM205.9bil commitments on loans, RM414.2bil from other liabilities and RM18.2bil of 1Malaysia Deve-lopment Bhd debts.
In 2021, the government paid RM41bil to service debts, with the amount estimated to increase to RM46bil this year.
