MP SPEAKS | As a government that is committed towards full disclosure, the Finance Ministry (MOF) reaffirms that there was only RM450 million left in the Consolidated Revenue Account when the Pakatan Harapan took over the federal government on on May 9, 2018.

Some questioned whether these figures were true even though they were revealed and confirmed by the accountant-general Saat Esa. Others asked how was it possible for the Harapan government to continue to pay monthly salaries and pensions of RM8 billion with only RM450 million.

The drastic decline of RM11.41 billion or 96 percent in the Consolidated Revenue Account over four months from Dec 31, 2017 to April 30, 2018 is tabulated below:

Only monies in the Consolidated Revenue Account can be spent on government expenditure. The table above showed the month-by-month decline in the Consolidated Revenue Account due to excessive expenditure in the run-up to the general election.

During the four months from January to April 2018, revenue collected during the four-month period was RM71.88 billion compared with operating expenditure of RM83.29 billion, resulting in a current account balance deficit of RM11.41 billion. This RM11.41 billion deficit caused the Consolidated Revenue Account, which started with RM11.86 billion at the beginning of the fiscal year 2018, to end up with only RM450 million at the end of April 2018.

Due to the alarming fiscal position of the federal government when Harapan first took over the administration on May 9, we were left with no choice but to implement stringent measures to control the operating expenditure and practise prudent spending.

Furthermore, Harapan’s clean administration of competency, accountability and transparency (CAT) has allowed not only savings from eliminating corrupt practices but also efficiency gains from institutional reforms such as open competitive tenders.

Due to the sound and prudent financial management practices of the Harapan government, a surplus in the current account balance of RM3.25 billion was achieved over the four-month period from May to August 2018. The analysis of the current account balance surplus is shown below:

The revenue for the four-month period from May to August 2018 has increased by RM1.70 billion from RM71.88 billion to RM73.58 billion when compared against the previous four-month period from January to April 2018, whilst the operating expenditure has declined substantially by RM12.96 billion from RM83.29 billion to RM70.33 billion.

This current account balance surplus of RM3.25 billion has helped the federal government to record an increased Consolidated Revenue Account balance of RM3.70 billion as of Aug 31, 2018.

The seven-fold increase in the Consolidated Revenue Account by RM3.25 billion in only four months, from RM450 million in the Consolidated Revenue Account on April 30, 2018 to RM3.70 billion on Aug 31 2018, is a testament to the good financial management of the Harapan government.

The seven-fold increase in the Consolidated Revenue Account from May to August 2018 explains how the Harapan government managed to secure sufficient funds to run the administration of the federal government including paying the monthly RM8 billion salaries and pensions.

The Harapan government is intent on proving that a clean government can not only liberate Malaysia from being known as a global kleptocracy but also help us to find new sources of revenue.

LIM GUAN ENG is finance minister and Bagan MP.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.