Idris Jala can go on with his mantras on Malaysia’s positive macroeconomic indicators . I will go on with my response to indicate that whatever he said is half-truth or even misleading.

What fiscal reforms was he talking about, which according to him have trimmed the deficit in the past five years?

First, where is the productive and value spending over the past five years? Yes, the Goods and Services Tax (GST) was introduced, but that was to continue the government’s profligate way. With oil prices now falling from the roof, I don’t see how GST will be able to sustain the government’s fiscal position for long if no serious revamp and reprioritisation of government spending are undertaken.

It is my humble observation that every Government Transformation Programme (GTP) is a new and additional programme without culling any of the existing one. How then can we talk about reforms and restructuring in the public sector? If Idris Jala is serious, he should have shown us substantive reforms in government expenditure using the comments of auditor-general’s reports as the guide over the past five years.

Second, for Idris Jala’s information, selling government assets or using money from the trust funds such as from KWAP to make the deficit looks better are strictly and technically incorrect. Sales of government assets and money from trust funds are not recurring operating revenue but one-off items which, if included, will give a misleading picture on government finance.

Third, according to Idris Jala, Malaysia is in a ‘safe zone’ because public debt is below 75 percent of GDP and annual fiscal deficit is 4 percent of GDP or below. For this, let me remind Idris Jala that the overall strength of the economy is not determined by one or two magical numbers alone.

The debt and fiscal positions must be considered together with other fundamentals - the exports and imports, balance in the current account of BOP which include capital flows, value of ringgit, inflation, trend and recovery in commodity prices, economic health of Malaysia’s major trading partners and other factors. Worsening trends in any of these factors may negate the positive trends in government finance and public debt.

Define ‘public’ debt

Fourth, Idris Jala must properly define what constitutes ‘public’ debt. For this, he must tabulate all debts which the federal government is ultimately responsible. This would include the debts of the federal government, public enterprises, government-linked companies (GLCs), statutory bodies, state governments, local authorities, and privatised entities which the federal government stood as guarantor.

For example, debts accumulated in Pembinaan PFI, Perbadanan PR1MA, 1MDB, and PKFZ should be included as parts of the public debt.

Fifth, as for deficit, Idris Jala must include all off-budget operations which are not reflected in the federal budget but will eventually impinge on government finance. Again, he must tread carefully all investments, obligations and activities in Pembinaan PFI, Perbadanan PR1MA, 1MDB and countless other off-budget agencies, including many formed under the state governments.

Sixth, Idris Jala must explain the recent RM20 billion additional allocation to ValueCap, the funding of which has come from Khazanah Nasional Bhd, KWAP and Permodalan Nasional Bhd (PNB). Can we see that it is off-budget agency (Khazanah), trust fund (KWAP) and private money (PNB) that is financing a government programme? Is this not enlarging government operations without showing the full implications on the federal budget?

Where are the Parliamentary oversights on supply bill and federal government budget?

We must get real; there is no prudent financial management without oversights.