SHAH ALAM, Nov 28 — The Pakatan Harapan government has never borrowed money to pay its civil servants’ salaries, the Finance Ministry said today.
Its minister Lim Guan Eng said in a statement that this was proven by the reaffirmation of Malaysia’s sovereign credit ratings at A3 or A- with a stable outlook.
“Should the Federal government borrow to pay the salaries of its civil servants, this would inevitably lead to an immediate credit rating downgrade.
“Let me reiterate unequivocally that the government has sufficient funds to pay our civil servants and will never borrow to do so,” said Lim in the statement.
Lim said the government had to cut its fiscal deficit from 3.7 per cent of gross domestic product (GDP) in 2018 to 3.4 per cent this year.
He said all the borrowings raised by the Federal administration were to finance the fiscal deficit and all development expenditures, which was also practised by the former Barisan Nasional government.
“None of the borrowings is utilised for operational expenditure, like the payment of salaries,” he said.
Lim was responding to the statement by Umno’s deputy president Datuk Seri Mohamad Hassan during the Negri Sembilan’s budget debate in the state legislative assembly on November 25, in which the latter had claimed that the Federal government borrowed money to pay the civil servants’ salaries.
“… Datuk Seri Mohamad Hassan casually made an irresponsible allegation that the Federal government borrowed money to pay the salaries of its civil servants.
“His statement is false and can be disproved easily,” the statement read.
Lim said the Federal government’s emoluments was RM19.9 billion in the third quarter of 2019, while the total revenue for the same quarter was RM68.8 billion.
“This means the government’s revenue was more than 3 times the size of its emoluments,” he said.
Citing as an example, Lim said the Kelantan government had in October requested for an advance from the Federal administration worth RM100 million, which was to assist the state with its operational expenditure, including the payment of salaries until the end of the year.
“Last year in 2018, the Federal government agreed to advance the Kelantan state government RM91.5 million for the same purpose.
“Datuk Seri Mohamad Hassan has pointed to the wrong target and should be referring to the Kelantan state government instead of the Federal government.
“The Federal government is capable of paying its civil servants and meeting its other financial obligations, unlike the situation faced by the Kelantan state government,” he said.
