Friday 29 Mar 2024
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This article first appeared in The Edge Financial Daily on October 24, 2018

KUALA LUMPUR: The Kelantan state government is the largest debtor among Malaysian states with RM388 million in advance financial assistance still owed to the federal government as at Dec 31 last year, said Finance Minister Lim Guan Eng.

Guan Eng said in 2016, Kelantan received RM398 million in overall financial assistance from the federal government. Such assistance is also given to other states with insufficient funds in their operating accounts.

“Included in the RM398 million  is a deficit financial assistance amounting to RM59.9 million as the state has insufficient revenue to pay for operating expenses such as salaries and emoluments of the staff,” the minister said in a statement yesterday.

Separately, the federal government had also provided an advance loan of RM100 million to the Kelantan state government to help the state cover its operating expenditure, Guan Eng added.

Guan Eng disclosed that in June this year, the Kelantan state government applied again for another advance financial aid to help the state pay salaries and emoluments of the state government’s employees. The application was approved by the federal government.

The finance minister was responding to calls by PAS parliament members that his previous statement on the state’s ailing financial situation be withdrawn.

On Monday, Guan Eng said in Parliament the Kelantan state government had insufficient funds to pay its civil servants after a PAS member of parliament (MP) suggested that Kelantan, Pahang and Terengganu be allowed to manage the multibillion-ringgit East Coast Rail Link project if the megaproject is cancelled.

Guan Eng’s remark was met with anger and demands for a retraction as opposition MPs had deemed it an insult to the PAS-controlled state government. Responding yesterday, Guan Eng said he is highly disappointed with PAS’ reaction, claiming he is unfairly treated.

Guan Eng said his statement is similar to what former prime minister Datuk Seri Najib Razak had said on Jan 28, that the Kelantan state government is not able to pay their civil servants’ salaries.

On Sept 8, Guan Eng said the Kelantan state government is the largest recipient of financial deficit assistance and advance financial assistance from the federal government at a total of RM913 million.

“It’s a fact that Kelantan state government is always seeking money from the federal government to help pay its civil servants’ salaries since the Barisan Nasional party ruled the country before,” Guan Eng said yesterday.

“I wish to stress that economic management and financial administration must be done based on facts and figures, and not sentiments and malicious slander. It is difficult to restore public and investor confidence or to redevelop a failed state if we ignore facts and figures.”

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