1MDB is not mentioned in Budget 2017 that was presented to Parliament on Oct 21 and Economic Report 2017, which gave an overview of the nation’s economic progress, because they are two separate matters.

In his explanation, Second Finance Minister Johari Abdul Ghani said the government's budget had nothing to do with 1MDB, which was managed by its board.

“A budget is a budget, 1MDB is 1MDB, they are two separate matters.

“Budget is something that we present to the public to explain what the government is going to do - how to spend the money with the revenue. The budget has nothing to do with 1MDB. Please tell me which part is related,” he told Malaysiakini.

“But it is wrong to say that we are not addressing (the problem of) 1MDB,” he said.

“Divesting some of the assets to pay the bills and looking at joint-venture partners to develop the land are among the rationalisation (1MDB debt management plans),” he elaborated.

Resolving the dispute with Abu Dhabi’s International Petroleum Investment Company (IPIC) is also one of the government’s strategies in addressing the issue, he said.

The government had demonstrated its openness when it instructed the Public Accounts Committee (PAC) to conduct a hearing on 1MDB, he said.

On top of that, he said, the government allowed foreign authorities to conduct relevant enforcement action and investigations and to file lawsuits on matters related to 1MDB.

'Only when problems arise'

In its practice, Johari said, the government would only bring the matter to Parliament’s attention when a problem arose.

Citing Malaysia Airline System (MAS) as an example, he said the government gave a guarantee for MAS in its operations revamp exercise and told Dewan Rakyat about it.

“But when MAS has no problem, we don’t tell Parliament,” he said.

DAP lawmaker Tony Pua had brought up the issue of ballooning deficit amongst the government’s non-financial public corporations (NFPCs) spending deficit in his Sunday statement.

He said that the spending deficit was RM10.6 billion in 2013, but was estimated to reach RM50.5 billion this year.

Pua had alleged that either 1MDB or the projects conducted by its subsidiaries, was once listed as one of the 30 NFPCs in the previous economic report, only reduced to 29 NFPCs in the Economic Report 2014/2015.

Pua then alleged the deficit could be higher if the government were to include 1MDB or its subsidiaries as one of the NFPCs.

He told Malaysiakini that the government should include 1MDB to better reflect the government-linked companies' (GLCs) performance.

Pua made the allegation based on Economic Report 2012/2013, which stated NFPCs involved in projects, among others, mixed development in Bandar Malaysia and Tun Razak Exchange (TRX), would have significant impact on economic growth as well as transform the physical, financial and digital landscape of Malaysia in future.

The previous economic reports, however did not list out all the 30 companies.

Investment firms 'excluded'

Johari clarified that 1MDB was never included as one of the NFPCs in the previous economic reports.

“Why 1MDB is not one of the 29 or 30 NFPCs? Because NFPCs are defined as operating companies. But if you are an investment company, then you are not included,” he said, adding Khazanah did not make it to the list for the same reason.

He said the subsidiary could be listed under NFPCs in the economic reports if at least 50 percent of the operating company's equity was owned by the government and had an annual turnover of RM100 million.

Johari, however disagreed that the financial health of a government's company could be defined by merely looking at its deficit.

“I think the calculation is wrong. You cannot calculate deficit in this way. You will only have a deficit when both the balance sheet and shareholders' fund are in the negative,” he said.

“But if their shareholder’s fund is positive, which means that they have a corresponding asset, then you cannot call it a deficit,” he said.

“The 29 companies listed out are healthy companies, they paid corporate tax and the goods and services tax (GST). They have liabilities but at the same time, they have assets.

“They are not in deficit, they have liabilities and corresponding assets; (but) you cannot look at liabilities without looking at the assets,” he said.