KUALA LUMPUR (May 5): Malaysia federal government debt could reach RM1 trillion by 2021 if it continues to grow at the same average rate of 10% as in the past decade, The Edge Malaysia business and investment weekly reported in its latest May 7 - 13, 2018 issue.

The Edge reported that the nation's total government-guaranteed debt stood at RM226.88 billion as at Sept 30, 2017.

"If federal government debt is allowed to continue growing at the rate it has grown in the past decade, it could reach RM1 trillion by 2021, RM2 trillion by 2028 and RM3 trillion by 2032, back-of-the-envelope calculations show. Already, for every ringgit the government collects, nearly 99 sen goes to operating expenses. This cannot be what sustainable growth looks like.

"(In 2018) It does not help that 13% of federal government revenue is going to debt service charges this year when there are many other more productive needs. Debt service charges of RM30.88 billion represent 71% of the estimated RM43.8 billion GST collection and 96% of the estimated RM32.2 billion personal income tax collection for 2018. It is also enough to build at least 100 hospitals and 100 schools or the entire Pan Borneo Highway. Is anything being done to cut debt service charges, which is way above the RM12.9 billion (9.2% of revenue) in 2007?, The Edge reported.

The Edge reported that in seven of the last 10 years, Malaysia spent 99% of its revenue on operating expenses. According to The Edge, almost all the money the federal government collected in 2009, 2011, 2012, 2013, 2014, 2015 and 2016 was spent on operating expenses such as paying salaries and pension besides subsidies and interest on debt.

"Debt is taken to fund development expenditure because most of the money collected by the government has gone into operating expenses. Whether or not the opposition wins the chance to prove its point,

the incumbent government needs to prove to the people that the country’s income and resources are being used in areas that benefit the rakyat the most and Malaysia’s future growth," The Edge reported.

For a better understanding on Malaysia federal government finances ahead of the nation's 14th General Election, kindly pick up and read the latest issue of The Edge.