Federal debt up RM50bil to RM1.3 trillion, says Deputy Finance Minister
The Deputy Finance Minister said the increase was due to the government's need to finance fiscal deficits to support development expenditure (DE).
"Government borrowings are utilised prudently to fund strategic development projects such as infrastructure, education, healthcare and social protection programmes," she told the Dewan Rakyat during Question Time on Tuesday (July 29).
She was responding to a question from Datuk Ngeh Koo Ham (PH-Beruas) on the government's efforts to manage its rising debt and liabilities.
Lim said the government would continue to optimise public spending through subsidy rationalisation, statutory body reforms and a comprehensive review of government expenditure.
She said other steps being taken include a gradual fiscal consolidation strategy, broadening the revenue base and ensuring sustainable revenue collection.
"Government borrowings are strictly channelled to fund DE projects and programmes that generate long-term benefits for the country and the people.
"In addition, we have set a 25% ceiling on government financial guarantees as a share of GDP under the Fiscal Responsibility Act 2023 to ensure our financial exposure remains within manageable levels based on current economic capacity," she added.
Lim also noted that the government is prioritising user-pay oriented projects under the 2030 Public-Private Partnership Master Plan to reduce its financial burden.
"Other measures include reviewing off-budget project implementation methods and only considering development projects that fall within the scope and ceiling of the Five-Year Malaysia Plans," she said.
Lim said strategic initiatives such as the National Energy Transition Roadmap, the New Industrial Master Plan 2030 and the Government-Linked Companies Empowerment and Reform Programme, along with policy enhancements like minimum wage adjustments, are expected to stimulate economic activity, strengthen government revenue and reduce reliance on borrowings.
"The government is also committed to institutional reforms in support of the national development agenda, including the tabling of the Government Procurement Bill to improve procurement processes and governance.
"In addition, a new law on state-owned enterprises is being drafted to enhance corporate governance, boost accountability and optimise performance," she said.
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