IF the RM28.87 billion allocated for debt service charges in 2017 were distributed to Malaysia’s population of 31.8 million, each person will stand to get RM908. Sadly, 13.1% of government revenue needs to go towards servicing the federal government’s debt that had escalated to RM655.75 billion in 2Q2016 (excluding the RM178 billion debt guaranteed by the government as at 1Q2016) from RM266.7 billion in 2007.
Compare the RM28.87 billion with the charges of RM12.9 billion (9.2% of government revenue) in 2007 and RM6.4 billion (9.8% of government revenue) in 1997. The charges have been more than 10% of government revenue since 2014.
The projected debt service charges are slightly more than the RM28.2 billion personal income tax collection and 75% of the RM38.5 billion GST collection expected for 2016. It also means the government needs to come up with RM2.4 billion a month, or RM555 million a week or RM79 million a day, to service its debt.
In infrastructure terms, the RM28.87 billion is enough to fund 90% of the Sungai Buloh-Serdang-Putrajaya (SSP) MRT Line, which is expected to cost RM32 billion. It is also the size of seven klia2s (RM4 billion), six Second Penang bridges (RM4.5 billion), 19 Bus Rapid Transit systems (KL-Klang line RM1.5 billion) or 72 hospitals (based on the cost of IHH Healthcare’s RM400 million Gleneagles Medini, Nusajaya).
It is also 70% of the RM41.3 billion allocated under the Malaysian Education Blueprint 2013-2025 to build 30 primary, 27 secondary and five fully residential schools, plus four MARA junior science colleges. The RM123 billion Malaysia spent to service its debt between 2013 and 2017 was three times the allocation.
Malaysia could have boosted its coffers substantially in the past two decades had there been less debt service charges or had its economy expanded further with higher development spending. Between 1997 and 2017, the RM311 billion that went to debt service charges is equivalent to Bill Gates’ net worth of US$75 billion (based on the Forbes 2016 World Billionaires list). It is also 1.2 times the combined net worth of Malaysia’s top 50 billionaires.
For the ordinary Malaysian, the RM28.76 billion is enough to give every Malaysian RM133 and a weekly KFC dinner plate treat for a whole year. It is also five times the RM5.4 billion allocated for Bantuan Rakyat 1Malaysia (BR1M) last year.
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