Debt servicing will soon overtake education spending as the biggest expenditure at the current rate of borrowing
Finance Minister II Johari Antidote for a stigma, as an instrument, the Budget makes us believe in the possibility of top-down policy driven change that does not need to navigate Malaysia’s messy ground realities, for those seem insurmountable. The Budget aggregates intent and legitimizes an ivory tower of hope, a central vantage point from where pathways to change suddenly appear from amongst the dense undergrowth of the polity. A small bang is another name for a loud noise, "time bomb" and the time for those is past. In some ways, the budget acknowledges this, by avoiding making dramatic claims, and opting for a relatively low-key programmatic approach. There is an implicit political honesty in this Budget, in that by and large its reach does not exceed its grasp. The advantage of the direction that is signaled by the budget is that it seeks to build momentum by creating the conditions for change. By not opting for radical changes that generate energy purely on account of their freshness, the need to ensure flawless execution becomes all that more important. Here, it will be important for this government to keep its own ability to sell dreams and market its actions at bay for it can end up deluding itself more than anyone else. Things must move on the ground, and for that what needs to change lies outside the syllabus of the Budget. Without a concerted effort to overhaul the political and administrative infrastructure, the government will find it difficult to deliver any of its major schemes. Conceptually, the devolution of financial authority to the states is an idea that is a progressive idea, but it also means the government is dependent on a machinery that it has little control over.
The real signiIn that sense, the Budget and the approach it signals is a big bet. It backs an ability to get things done, without having invested too much in ensuring that things will work at the ground level. It is a vote of confidence in that part of the economy which does not generally inspire too much faith. The big timidness of this government so far is not in the absence of big bang economic reforms; there it takes a view that is politically aware, but in shying away from changing itself and the way it works.It is not that the inflation problem and the mess in banks were not known, but Johari decided to take them head on than kicking the can down the road. It is anyone’s guess what agenda a "time bomb" but not rowing back on these two fronts would mean prudence prevails over populism.
Treasury secretary-general Mohd Irwan Serigar Abdullah has dismissed claims that the increasing deficit recorded by non-financial public corporations (NFPC) amounted to a "ticking time bomb".
He said there is nothing to worry about, as the economy is stable and the NFPCs are large companies that would be able to repay their loans once they recoup their investments.
Debt servicing will soon overtake education spending as the biggest expenditure at the current rate of borrowing
this is precisely this kind of "clever accounting" hiding excesses from the one pocket in another that will get our economy into trouble. By the time these people are done with scrapping our coffers, those who stay back, including our children will be saddled with an astronomical national debt. This is neither fair nor very smart.
the scale of these NFPC deficits, the federal government budget deficits for 2015 was RM37.2 billion. In 2016, it is estimated to hit RM38.7 billion while the government forecast RM40.3 billion for 201
NFPCs includes 29 key government-linked companies including Indah Water Konsortium, KTM Bhd, Telekom Malaysia, Malaysia Airlines Bhd, Malaysia Airport Holdings, Petronas, Prasarana, Syarikat Perumahan Negara, Tenaga Nasional, MRT Co and the UEM Group., the 29 GLCs accounted in the NFPC do not include debt-stricken 1Malaysia Development Bhd which is mired in more than RM20 billion of debt.
What is most alarming from the table is the NFPC’s spending deficit. In 2013, the NFPC deficit was a modest RM10.6 billion. However, since then, the NFPC deficit leaped astronomically to RM52.3 billion in 2014 and further increased to RM56.9 billion in 2015. The estimated deficit for 2016 is currently RM50.5 billion.
To lend context and perspective to the scale of these NFPC deficits, the federal government budget deficits for 2015 was RM37.2 billion. In 2016, it is estimated to hit RM38.7 billion while the government forecast RM40.3 billion for 2017.
This self-styled Najib‘King of Good Times’ goes into a tailspin,
must tightened its purse strings and appoint an independent auditor to monitor its financial on preparing a blueprint for accepting reforms rather than delaying tactics which have led to dark clouds of uncertainty over the future The analysis warns of deflation creating problems for debt servicing, but needs to remember that same deflation
will point out that borrowing through public sector companies rather than the Budget makes no difference to the public sector borrowing requiremen which some economists will say is the most relevant parameter to target. Very true. But the Fiscal Responsibility and Budget Management
By targeting the fiscal deficit rather than the PSBR, the Act gave the finance minister some flexibility in meeting his targets. He should use it.
Finally, enormous sums can be borrowed by government corporations. So why load the borrowing burden on the Budget?
The whole world economy is in trouble, slowing for a third successive year.The government constantly lacks funds for badly needed infrastructure. Jaitley’s solution is for government undertakings to routinely sell existing assets, and use the sale proceeds to finance
Budget (and economy) will not be the only casualties.
The greatest potential lies in recycling infrastructure. Instead of depending on money from the stressed budget
The analysis of Najib’s Budget has not focused on issues like the fiscal deficit, this Budget, but with fingers crossed. First, it may be based on faulty statistics. Second, the global financial typhoon sweeping across emerging markets may make nonsense of all Budget projections
1/2 Hiding massive borrowings under GLCs to beautify its heavy budget deficits yearly has been the hallmark of Najib’s deceptive financial wizardry. And that is in line with his political philosophy of emphasizing on forms while foregoing substance. His annual budget speech is a fine example. All sounds and fury, but very little substance. Take his budget 2017. Full of little goodies here and there designed to capture electoral support of his target groups of voters, but hardly any policy decisions to deal with the real problems that are bedevilling the country politically and economically. Issues such as colossal corruption with impunity that has sapped investors’ confidence, institutional reforms to restore public trust, liberalising the economy by encouraging free enterprise in lieu of state control and crony monopolies, rejuvenate education system to upgrade human resources, promote research and systemic agenda to increase mechanization and raise productivity,
Sell NFPCs that burn funds
the government can sell old roads to finance new ones; sell old ports to build new ports; and sell old power stations to build modern ones. Public sector entities can sell entire subsidiary companies, or projects, or vacant land to finance fresh projects.envisages a quadrilateral of bullet trains connecting India’s four metro cities, with more to follow. However, this cannot be done without radical surgery to rectify the total mess in the current structure and finances
.
Finance Minister II Johari Antidote for a stigma, as an instrument, the Budget makes us believe in the possibility of top-down policy driven change that does not need to navigate Malaysia’s messy ground realities, for those seem insurmountable. The Budget aggregates intent and legitimizes an ivory tower of hope, a central vantage point from where pathways to change suddenly appear from amongst the dense undergrowth of the polity. A small bang is another name for a loud noise, "time bomb" and the time for those is past. In some ways, the budget acknowledges this, by avoiding making dramatic claims, and opting for a relatively low-key programmatic approach. There is an implicit political honesty in this Budget, in that by and large its reach does not exceed its grasp. The advantage of the direction that is signaled by the budget is that it seeks to build momentum by creating the conditions for change. By not opting for radical changes that generate energy purely on account of their freshness, the need to ensure flawless execution becomes all that more important. Here, it will be important for this government to keep its own ability to sell dreams and market its actions at bay for it can end up deluding itself more than anyone else. Things must move on the ground, and for that what needs to change lies outside the syllabus of the Budget. Without a concerted effort to overhaul the political and administrative infrastructure, the government will find it difficult to deliver any of its major schemes. Conceptually, the devolution of financial authority to the states is an idea that is a progressive idea, but it also means the government is dependent on a machinery that it has little control over.
The real signiIn that sense, the Budget and the approach it signals is a big bet. It backs an ability to get things done, without having invested too much in ensuring that things will work at the ground level. It is a vote of confidence in that part of the economy which does not generally inspire too much faith. The big timidness of this government so far is not in the absence of big bang economic reforms; there it takes a view that is politically aware, but in shying away from changing itself and the way it works.It is not that the inflation problem and the mess in banks were not known, but Johari decided to take them head on than kicking the can down the road. It is anyone’s guess what agenda a "time bomb" but not rowing back on these two fronts would mean prudence prevails over populism.
Treasury secretary-general Mohd Irwan Serigar Abdullah has dismissed claims that the increasing deficit recorded by non-financial public corporations (NFPC) amounted to a "ticking time bomb".
He said there is nothing to worry about, as the economy is stable and the NFPCs are large companies that would be able to repay their loans once they recoup their investments.
Petaling Jaya Utara MP Tony Pua said treasurer-general Irwan Serigar Abdullah did not tell the whole truth when dismissing his (Pua’s) claim that Non-Financial Public Corporations (NFPC) were a "time bomb" for the Malaysian budget.In a statement, Pua quoted Irwan's response to his earlier warning, issued in response to Budget 2017 tabled last Friday, that a time bomb was hidden in the depths of the government's Economic Report.
"Why didn’t Tan Sri Irwan Serigar point out the fact that Prasarana’s RM13 billion of debt and mounting expenses have only increased and that it requires annual government grants to keep the company afloat?" Pua asked.the government has hidden the bulk of its excessive spending under the NFPCs to maintain a semblance of “moderate” budget deficit. However, so much spending has now been shifted to these NFPCs, that the NFPC deficit has grown by leaps and bounds to now become even bigger than the federal government deficit!the time the time bomb explodes, There is no question that the NFPC deficit is the biggest time bomb to the Malaysian public finances. We can already feel its ticking with the rapidly rising “debt service charges” which the government is forced to bear annually. This is caused, in no small part, by the government being obligated to pay for interest and loans that the NFPCs are unable to fulfill The federal government’s debt service charges have increased from RM20.3 billion in 2013 to a projected RM28.9 billion in 2017. The increase will only accelerate and snowball as NFPC financial obligations arising from the massive deficits are realised in the years to come.
Debt servicing will soon overtake education spending as the biggest expenditure at the current rate of borrowing
this is precisely this kind of "clever accounting" hiding excesses from the one pocket in another that will get our economy into trouble. By the time these people are done with scrapping our coffers, those who stay back, including our children will be saddled with an astronomical national debt. This is neither fair nor very smart.
NFPCs includes 29 key government-linked companies including Indah Water Konsortium, KTM Bhd, Telekom Malaysia, Malaysia Airlines Bhd, Malaysia Airport Holdings, Petronas, Prasarana, Syarikat Perumahan Negara, Tenaga Nasional, MRT Co and the UEM Group., the 29 GLCs accounted in the NFPC do not include debt-stricken 1Malaysia Development Bhd which is mired in more than RM20 billion of debt.
What is most alarming from the table is the NFPC’s spending deficit. In 2013, the NFPC deficit was a modest RM10.6 billion. However, since then, the NFPC deficit leaped astronomically to RM52.3 billion in 2014 and further increased to RM56.9 billion in 2015. The estimated deficit for 2016 is currently RM50.5 billion.
To lend context and perspective to the scale of these NFPC deficits, the federal government budget deficits for 2015 was RM37.2 billion. In 2016, it is estimated to hit RM38.7 billion while the government forecast RM40.3 billion for 2017.
This self-styled Najib‘King of Good Times’ goes into a tailspin,
must tightened its purse strings and appoint an independent auditor to monitor its financial on preparing a blueprint for accepting reforms rather than delaying tactics which have led to dark clouds of uncertainty over the future The analysis warns of deflation creating problems for debt servicing, but needs to remember that same deflation
will point out that borrowing through public sector companies rather than the Budget makes no difference to the public sector borrowing requiremen which some economists will say is the most relevant parameter to target. Very true. But the Fiscal Responsibility and Budget Management
By targeting the fiscal deficit rather than the PSBR, the Act gave the finance minister some flexibility in meeting his targets. He should use it.
Finally, enormous sums can be borrowed by government corporations. So why load the borrowing burden on the Budget?
The whole world economy is in trouble, slowing for a third successive year.The government constantly lacks funds for badly needed infrastructure. Jaitley’s solution is for government undertakings to routinely sell existing assets, and use the sale proceeds to finance
Budget (and economy) will not be the only casualties.
The greatest potential lies in recycling infrastructure. Instead of depending on money from the stressed budget
The analysis of Najib’s Budget has not focused on issues like the fiscal deficit, this Budget, but with fingers crossed. First, it may be based on faulty statistics. Second, the global financial typhoon sweeping across emerging markets may make nonsense of all Budget projections
1/2 Hiding massive borrowings under GLCs to beautify its heavy budget deficits yearly has been the hallmark of Najib’s deceptive financial wizardry. And that is in line with his political philosophy of emphasizing on forms while foregoing substance. His annual budget speech is a fine example. All sounds and fury, but very little substance. Take his budget 2017. Full of little goodies here and there designed to capture electoral support of his target groups of voters, but hardly any policy decisions to deal with the real problems that are bedevilling the country politically and economically. Issues such as colossal corruption with impunity that has sapped investors’ confidence, institutional reforms to restore public trust, liberalising the economy by encouraging free enterprise in lieu of state control and crony monopolies, rejuvenate education system to upgrade human resources, promote research and systemic agenda to increase mechanization and raise productivity,
Sell NFPCs that burn funds
the government can sell old roads to finance new ones; sell old ports to build new ports; and sell old power stations to build modern ones. Public sector entities can sell entire subsidiary companies, or projects, or vacant land to finance fresh projects.envisages a quadrilateral of bullet trains connecting India’s four metro cities, with more to follow. However, this cannot be done without radical surgery to rectify the total mess in the current structure and finances
.
No comments:
Post a Comment