KUALA LUMPUR: The position of the government of depending on new loans to finance the repayment of loan principals which have matured is described as worrying.

Auditor-General, Datuk Nik Azman Nik Abdul Majid said even though the certificate of the Auditor-General for year 2020 was issued with a clean certificate status without any reprimand, several matters should be given emphasis including the status of federal debts.

"Half of the new loans were used to pay loans which have matured when they should be paid with surplus revenue.

"Nonetheless, in 2020, the country was facing the COVID-19 threat and the government was forced to take measures to assist the health system and the people to combat COVID-19," he said at a media conference at Parliament building here today.

The Auditor-General's Report on the Federal Government Financial Statement as well as 2020 Federal Ministries and Departments Compliance Audit tabled at Dewan Rakyat today found RM98.058 billion or 50.4 per cent of RM194.555 billion of new loans of the government was for the repayment of the principal of loans in 2020.


The amount rose by RM15.335 billion compared to the total of RM82.723 billion in 2019.

Therefore, Nik Azman said, the department proposed prudent spending and ensure all development expenditures are financed with loans that should be serviced according to schedule within reasonable costs without leakages or wastage.

Apart from that, another issue that was given attention was the Development Fund for 2020 was not fully used for the purpose of development.

"We found RM2.6 billion used to fund maintenance expenditure which is usually funded by operating expenditure.

"The funds for development are mostly from borrowings which should be used to generate revenue in future even though it is allowed under the act in Development Fund but from the economic aspect, we feel it is not so appropriate, we hope the government will look into the matter," he added.

He also hoped the deficit ratio which increased 6.2 per cent in the Gross Domestic Product (GDP) would be temporarily considering the COVID-19 situation and the government is confident of taking the necessary measures when the pandemic recedes.

-- BERNAMA