Lim: Extra debt due to previous govt’s guarantee

THE increase of RM22bil in the country’s overall debt since May has nothing to do with the tax holiday on the Goods and Services Tax, says Finance Minister Lim Guan Eng.

“The increase in debt is not due to the new Government,” Lim said when replying to a question raised by Datuk Seri Reezal Merican Naina Merican (BN-Kepala Batas).

Reezal asked if the increase of the nation’s direct debt by RM22bil was to cover the estimated RM11bil loss in revenue due to the tax holiday and government restructuring.

Lim said the increase was due to previous government’s guarantee of some RM102bil in loans.

“As the guarantor, the Government is assumed to act as the borrower if the loan is not repaid by the borrower,” he said.

Earlier to a question by William Leong (PH-Selayang), Lim said that steps taken to refinance some of the loans had saved the present Government RM1bil annually.

He said the Government’s direct loans amounted to RM687bil, of which 97% or RM666bil were domestic debt borrowings, with only 3% or RM21bil being debts in foreign currencies.

He assured MPs that the Government would rely on foreign loans sparingly.

“If foreign loans are needed, the Government will negotiate for the best terms possible for the sake of the country,” he said.