INTERVIEW | When Dr Mahathir Mohamad decided to run for office again, he did so by promising, among other things, to correct the country's debt situation.

But it was only when the new Mahathir administration went through the books that they discovered the federal government owed more than just creditors - they owed taxpayers too.

First, there was the RM19.4 billion in GST refunds that the Customs Department could not pay back. Then there was RM16 billion in income and real property gains tax refunds, stretching back more than six years, which were held back.

In an interview with Malaysiakini yesterday, the prime minister grew exasperated when he spoke on how his team's efforts to rebuild a government was being hamstrung by the unravelling of one financial hole after another.

Segueing from explaining how “stupid” people from the previous administration had signed bad deals with China which contributed to the nation’s mounting debt, Mahathir complained about how the previous administration collected taxes in earnest, only to struggle with refunds, which he must now solve.

“They do all kinds of things which are wrong. For example, they collected excess income tax and now we learnt that RM16 billion were collected which were not due. Now we have to pay.

“They don't care (even) if they had won the election. They won't pay these people. They couldn't care less,” said the clearly irate Mahathir.

Doing the right thing

In all, the tax refunds due amounts to RM35.2 billion - approximately 2 percent of the GDP - which Mahathir said his administration intends to pay back.

“We have to do the right thing,” he said.

“We have an obligation to honour our words even if these words were actually uttered by the previous government. We inherited all the mistakes of the previous government and it has been a terrible thing trying to rebuild the whole government”.

Terrible, according to Mahathir, because many of the top civil servants who allowed the previous administration to make these decisions are still in office and are getting in his way.

“The whole administration has been subverted. There are many officers who work only for the party, to the point of campaigning, wearing blue shirts and all that.

“Some of them are still out to frustrate this government, by not carrying out instructions and all that,” he said.

This, said Mahathir, had led him to distrust many of the government officers which he saw to be complicit in the “dismantling” of the government for BN’s purposes.

“We have to rebuild the government… allocate and define jobs that need to be done. At the same time, we don’t have the money. We have to pay the (tax refunds owed),” he said.

Propping up the market with ‘stolen money’

The previous administration, said Mahathir, had no qualms borrowing money in other to artificially invigorate the economy without worrying about repayment.

“Some people in the markets feel (that) if you spend stolen money, if you spend money which you borrowed and cannot repay, that it is fine because it creates jobs. Consumption will go up and all that.

“Which is more important? To rebuild the finance and economy, or allow the economy and the finances to rot further so that you can borrow and spend (to) have a good report because, as you know, consumption is part of the contribution towards GDP.”

Mahathir has just returned from China where he attempted to convince the country’s leaders that past deals inked between Chinese companies and the Najib Abdul Razak administration had to be renegotiated because Malaysia could not afford it.

His administration has alleged that the Najib administration had borrowed too much for mega projects involving Chinese firms such as the East Coast Rail Link and two gas pipeline projects.

Malaysia’s preference was for these projects to be cancelled, or at least deferred. Negotiators will now have the hard task for hammering out the details.

THE MAHATHIR INTERVIEW

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