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Showing posts with label Lim Guan Eng. Show all posts
Showing posts with label Lim Guan Eng. Show all posts

Monday 11 February 2019

Malaysia Finance Minister Lim Guan Eng's credentials as an accountant questioned



On Malaysia Finance Minister Lim Guan Eng's website, it is stated in his biodata that he graduated from Monash University, Australia, with a Bachelor of Economics degree and was a qualified professional accountant by 1983.PHOTO: ST FILE
 
PETALING JAYA (THE STAR/ASIA NEWS NETWORK) - Malaysian Finance Minister Lim Guan Eng's qualification in accounting is the latest to come under scrutiny following a series of alleged false education credentials involving Pakatan Harapan leaders.

Malaysian Chinese Association (MCA) president Wee Ka Siong, in questioning Mr Lim's credentials as an accountant, said according to Monash University's website, Mr Lim obtained his Bachelor of Economics in 1984.

(MCA) president Wee Ka Siong
"I have no doubt over his degree qualification. However, I wonder how he became a qualified professional accountant in 1983 before he even graduated (in economics)?" he asked in a Facebook posting on Sunday (Feb 10).

On Mr Lim's website: https://limguaneng.com/ , https://limguaneng.com/index.php/biodata/ , it is stated in his biodata that he graduated from Monash University, Australia, with a Bachelor of Economics degree and was a qualified professional accountant by 1983.

Datuk Seri Wee, who is the Ayer Hitam MP, also wanted to know how Mr Lim's qualification as a "qualified professional accountant" was accredited.

"Was it by a local or foreign institution? Which country accepts an economics graduate to pass as a 'qualified professional accountant'?

For a minister who always stresses on the concept of Competency, Accountability and Transparency, please explain and don't keep quiet," he added.

Dr Wee also described as "suspicious" Johor Mentri Besar Osman Sapian avoiding questions from the media on his supposed UPM Bachelor in Accounting obtained in 1985.

"UPM's official website stated that the course was introduced in 1985. How is it possible that there could be such a super-fast graduate produced in the same year!

"If Osman fails to prove the genuineness of his academic credentials, will he still have the dignity to lead the state? This is a question of integrity among leaders," he said.

Citing examples of several world leaders who resigned or were sacked for having fake academic credentials, Dr Wee questioned if the Pakatan Harapan leadership would remain quiet and behave as if nothing happened.

"Or will they respond with the standard Pakatan answer, that a person's academic qualifications have nothing to do with political position," he added.

In Teluk Intan, Bernama reports Perak DAP chairman Nga Kor Ming as backing Tronoh assemblyman Paul Yong Choo Kiong who comes under public scrutiny for his dubious Masters in Business Administration (MBA) from Akamai University, United States, claiming that he had obtained it "legitimately".

This is despite the fact that DAP adviser Lim Kit Siang had labelled the university as a degree mill in 2005.

Mr Yong, 48, was also questioned by Dr Wee as to how he could do his MBA without having a first degree.

The Perak executive councillor has in his biodata listed his primary and secondary school education followed by his MBA.

Responding to the controversy, Mr Yong claimed that his way to enhance his self worth has been blown out of proportion.

He, however, did not reveal how he obtained his MBA.

"What is the relationship between this and politics?" asked Mr Yong.

Sources: https://www.straitstimes.com/asia/se-asia/malaysia-finance-minister-lim-guan-engs-credentials-as-an-accountant-questioned and
https://www.thestar.com.my/news/nation/2019/02/11/lims-credentials-as-an-accountant-questioned/

 
Related:


How to Become an Accountant: Skills, Degrees | All Business Schools



How to become a professional accountant in Malaysia? - Afterschool.my

 


"Accountancy is a very worthwhile profession": Michael Lim ...



Related posts:


Saturday 19 January 2019

Goldman Sachs must follow up on its apology with US$7.5bil compensation in 1MDB scandal

https://youtu.be/XxwX8CRvSks

Goldman Sachs Group Inc should follow up on its apology to Malaysia with a payment of US$7.5bil (RM30.86bil), says Lim Guan Eng.

The Finance Minister said a mere apology from the investment bank over the scandal-ridden 1Malaysia Development Bhd (1MDB) is not enough, unless they pay reparations and compensation.

Lim said Goldman Sachs should understand the agony and trauma suffered by Malaysians as a result of the scandal.

“An apology is not enough.

“An apology with US$7.5bil is what matters.

“At least he (Goldman Sachs CEO David Solomon) accepted that they have to bear and shoulder some responsibility but that is insufficient.

“They have made provisions of around US$561mil (RM2.3bil) but that is not adequate.

“We are seeking US$7.5bil,” he told a press conference here yesterday after announcing the names of the joint lead arrangers for the Samurai bond.

On Thursday, Solomon apologised to Malaysians for former banker Tim Leissner’s role in 1MDB.

Solomon also said it was very clear that Malaysians were defrau­ded by many individuals, including the highest members of the previous administration.

Asked if Malaysia would drop charges against Goldman Sachs with the US$7.5bil payment, Lim quipped: “US$7.5bil ... then we can discuss lah”.

Lim added that it was very clear who the top government official Solomon was referring to as there could only be one person.

“You worked hand in hand, and there has to be accountability. It also involved a breach in fiduciary duty, and I think the banking industry has this obligation to make good the losses that we suffered.

“I think this is at least an admission.

“If not for the change of government, do you think Goldman will apologise? We’re dealing with the largest investment bank in the world,” he said.

Lim added that he found it distressing that Datuk Seri Najib Tun Razak still refused to admit there was something wrong with 1MDB and the entire exercise.

He also lambasted the former premier for passing the buck to Goldman Sachs, and for being in a state of denial for refusing to admit that Malaysians suffered huge losses due to the scandal.

By Royce Tan The Star

Goldman Sachs CEO apologises for ex-banker’s role in 1MDB scandal



NEW YORK: Goldman Sachs Group Inc chief executive officer David Solomon (pic) has apologised to the Malaysian people for former ban­ker Tim Leissner’s role in 1Malaysia Development Bhd (1MDB) scandal, but said the bank had conducted due diligence before every transaction.

Goldman is being investigated by Malaysian authorities and the US Department of Justice (DOJ) for its role as underwriter and arranger of three bond sales that raised US$6.5bil (RM26.7bil) for the sovereign wealth fund.

US prosecutors last year charged two former Goldman bankers for the theft of billions of dollars from 1MDB. Leissner, a former partner for Goldman Sachs in Asia, pleaded guilty to conspiracy to launder money and violate the Foreign Corrupt Practices Act.

“It’s very clear that the people of Malaysia were defrauded by many individuals, including the highest members of the prior government,” Solomon said on conference call discussing the bank’s fourth-quarter results in a report by Reuters.

Solomon said Leissner denied the involvement of any of Goldman’s intermediaries in transactions with 1MDB.

An attorney representing Leissner did not immediately respond to a request for comment.

Roger Ng, the other charged former Goldman banker, was arrested in Malaysia at the request of US authorities and is expected to be extradited, according to John Marzulli, a spokesman for the prosecution.

The DOJ has said that US$4.5bil (RM18.5bil) was allegedly misappropriated by high-level officials of the fund and their associates between 2009 and 2014.

As part of Goldman’s due diligence efforts, Solomon said the bank sought and received written assurances from 1MDB and International Petroleum Investment Co (IPIC) that no third parties were involved in the first two bond sales.

Abu Dhabi’s IPIC had co-guaranteed the 1MDB bonds when they were issued in 2012.

In the final offering, the Malaysian government itself, along with 1MDB, represented that no intermediaries were involved, he said.

“All these representations to Goldman Sachs have proven to be false,” Solomon said.

Goldman Sachs did not disclose any other information about its involvement with 1MDB, but said the impact on its client franchise had been de minimis. Shares of the bank, which reported strong fourth-quarter results earlier in the day, have fallen over 25% in the last three months, after headlines about its involvement with the sovereign wealth fund emerged.

The Malaysian government said in December it was seeking up to US$7.5bil (RM30.8bil) in reparations from Goldman over its dealings with 1MDB. – Reuters

In an immediate reaction yesterday, former Prime Minister Datuk Seri Najib Tun Razak said Goldman Sachs had to take responsibility because they were appointed and paid by 1MDB to take care of Malaysian’s interests.

“We put up a system, the system was there to take care of our interests, you see.

“So if they fail, then they have to take responsibility, because they were appointed and paid by 1MDB to take care of our interests,” Najib said.- The Star

Related:

 Goldman Sachs  CEO David Solomon apologises for ex-banker's role in 1MDB scandal


Saturday 3 November 2018

Malaysia's Budget 2019: Making the tiger roar again in 3 years?

https://youtu.be/r8SdMk4UfTs https://youtu.be/SvZUBTyEoWQ https://youtu.be/BSp7aNmTZS4 https://youtu.be/hh_EYfFJZW8

The Pakatan Harapan government yesterday tabled its maiden budget that sought to restore Malaysia’s status as an “Asian Tiger” with a clean and transparent government that cares for the rakyat. (EPA/FANDY AZLAN)

KUALA LUMPUR: THE Pakatan Harapan government yesterday tabled its maiden budget that sought to restore Malaysia’s status as an “Asian Tiger” with a clean and transparent government that cares for the rakyat.

Finance Minister Lim Guan Eng, in tabling the 2019 Budget in Parliament, said: “As long as we are clean, people-centric and focused on carrying out institutional reforms, we can restore Malaysia back to fiscal health in three years.

“Let our love for our country unite us, our challenges make us stronger and our confidence awaken Malaysia as an Asian Tiger all over again.”

Themed “A Resurgent Malaysia, A Dynamic Economy, A Prosperous Society”, the RM314.5 billion budget for next year has three areas of focus with 12 key strategies.

One focus area — to ensure the socio-economic well-being of Malaysians — will be the key performance indicator of the government’s success.

“We will seek to meet this objective by ensuring welfare and quality of life, improving employment and employability, enhancing wealth and social welfare protection, raising real disposal income and education for a better future,” he said.

In a speech that lasted more than two hours, interrupted by intermittent heckling from opposition lawmakers, Lim announced a slew of measures to address the people’s key concerns, from cost of living to housing, healthcare, education and transport.

Cash grants for the low-income Bottom 40 (B40) group will continue, single vehicle/motorbike owners with engine capacity of 1500cc and below will get targeted fuel subsidy, and the minimum wage will be raised to RM1,100 from Jan 1.

A National Health Protection Fund, with free coverage on four critical illnesses of up to RM8,000 and a hospitalisation benefit of RM50 a day, was also introduced for the B40 group.

For the affordable home programmes, Lim announced an allocation of RM1.5 billion while Bank Negara Malaysia will set up a RM1 billion fund to help those earning below RM2,300 a month to own houses costing below RM150,000.

The government will also allow the private sector to engage in new crowdfunding schemes for first-time housebuyers.

The Education Ministry received the lion’s share of the budget, with an allocation of RM60.2 billion, including RM2.9 billion assistance for the poor and RM652 million to upgrade and repair schools.

An amount of RM3.8 billion has been set aside for government scholarships.

All intra-city toll rate hikes will be frozen next year, said Lim, and public transport users, meanwhile, can buy RM100 monthly passes for unlimited trips on RapidKL rail or bus services beginning January.

A RM50 monthly pass is also available for those who use RapidKL buses only.

Civil servants and pensioners were not left out — staff up to Grade 54 will receive a one-off special payment of RM500; while government pensioners will get RM250.

The budget deficit for this year is likely to be 3.7 per cent, while gross domestic product (GDP) growth is forecast at 4.8 per cent and 4.9 per cent next year.

To ensure strong and dynamic economic growth, another focus area is to promote an entrepreneurial state that leverages innovation and creativity, while embracing the new digital economy.

The government aims to provide at least 30Mbps broadband connectivity outside urban centres within five years, while funds have been allocated to encourage investments in green technology and transition into Industry 4.0.

Corporate tax rate will be reduced to 17 per cent from 18 per cent for SMEs with paid capital below RM2.5 million, and businesses with annual taxable income below RM500,000.

Meanwhile, after inheriting “a worrying state of financial affairs which was in dire straits” with debts amounting to RM1.065 trillion from the previous administration, the third area of focus is to implement institutional reforms that promote transparent fiscal discipline.

“We intend to table a new Government Procurement Act next year to govern procurement processes to ensure transparency and competition, while punishing abuse of power, negligence and corruption,” Lim said.

He said open tenders will not only achieve more value-for-money for taxpayers, it will also nurture an efficient and competitive private sector.

To ensure that Malaysia has a clean government, the budget also saw the Malaysian Anti-Corruption Commission receiving an increased allocation of RM286.8 million.

Lim said the allocation, which is an 18.5 per cent increase from this year’s, will see MACC employing up to 100 more staff next year as the government revs up its anti-graft campaign.

Putrajaya expects to collect a revenue of RM261.8 billion next year, including a RM30 billion dividend from Petronas.

To raise its revenue, the government will leverage its assets and review taxation policies.

This includes reducing its stake in non-strategic companies, expanding the Service Tax to cover online services, and raising licence fees and taxes in the gaming sector.- By Nst Team

The following are the highlights of the 2019 Budget, which was tabled by Finance Minister Lim Guan Eng in Parliament on Friday. (Bernama photo)
The budget carries the theme of "Credible Malaysia, Dynamic Economy, Prosperous Rakyat" and will focus on three main thrusts with 12 key strategies to recapture Malaysia's 'Economic Tiger' status.

The three main thrusts are:

*Institutional reforms
*People's wellbeing
*Promotion of entrepreneurial culture
.
The 12 strategies are:

*Strengthening fiscal management
*Restructuring and rationalising government debt
*Increase government revenue
*Ensuring welfare and quality life
*Increasing job opportunities and marketability
*Improving quality of healthcare services and social welfare protection
*Increasing disposable income
*Education for a better future
*Initiating new economic power
*Grabbing opportunity to face global challenge
*Redefining government’s role in business
*Ensuring economic fairness and sustainable economic growth


Related:

Govt vows to restore our finances - Nation


 

image: https://www.thestar.com.my/~/media/online/2018/11/03/03/17/budget-spread.ashx?la=en

Click to view details   
http://clips.thestar.com.my.s3.amazonaws.com/clips/news/2018/budget%202019%20p24.pdf

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Budget 2019: travel, departure levy

Vehicles must meet criteria for fuel subsidy - Saifuddin

Good news for 6.6 million road users - Nation


http://clips.thestar.com.my.s3.amazonaws.com/clips/news/2018/original%20petrol%20subsidy.jpg

Thursday 18 October 2018

Golden opportunity for DAP leaders to practise what they preached


In May this year, we voted for a change of government at both state and federal levels after 61 years of suffering under the yoke of Umno and its partners. We voted for hope and change.

The Pakatan Harapan (PH) parties went from being in the opposition to becoming the government of the day. When they were opposition politicians they could only voice their objections and concerns. But today they are in power to carry out what they hoped and fought for. Are they carrying out the trust that we placed in them?

Let us examine this in relation to the biggest project confronting the people of Penang (also one of the largest mega projects in Malaysia): the RM46 billion Penang Transport Master Plan (PTMP), and more immediately, phase 1 of this plan – the proposed Penang Island Link 1 (PIL 1) and the LRT project. The PIL 1 is an extension of the aborted Penang Outer Ring Road (PORR).

What did our present Chief Minister Chow Kon Yeow say when he was the opposition MP in 2002? “If the findings of the Halcrow Report are true, Dr Koh would be irresponsible in pushing the PORR through as this will not be a long-term solution to the traffic congestion on the island…”

There were two other minor reasons why Chow opposed the PORR: because it was a tolled road and no open tender was used to award the project. But these cannot be the main reasons for opposing it.

And what did Lim Kit Siang say on May 28, 2002?

“The nightmare of the Penang traffic congestion is likely to be back to square one, not in eight years but probably less than five years, after the completion of PORR.

“What Penang needs is an efficient public transport system based on sustainable transport policy, as PORR is not a medium-term let alone long-term solution to the traffic congestion nightmare on the island.”

Since these two DAP leaders could not be clearer on why they opposed construction of the PORR as it would not solve traffic problems, how does Chow now justify the PIL 1?

According to the environmental impact assessment (EIA) of the PIL 1, the consultants reported that by 2030 (between five and seven years after completion of PIL 1), traffic volume will reach up to 8,000 pcu/hour (passenger car unit) during evening peak hours.

Translated into layman’s terms, we would be back to square one in terms of traffic congestion. This was exactly what the transport report of 1998 by international consultant Halcrow said of PORR. Back then, Chow asked Koh Tsu Koon (then Penang’s chief minister) to disprove Halcrow’s findings. Today we ask Chow the same question.

Public policy must be based on scientific study, analysis and evidence, not on whims and fancies. (That is why the Penang state government funds the Penang Institute to provide sound policy analysis and advice.) If the EIA’s conclusion is that the PIL 1 will not solve traffic congestion in the medium and long term, then the chief minister must justify to the people of Penang on what other grounds he based his decision to spend RM8 billion on one highway that will not solve Penang’s traffic congestion and is fraught with safety risks, on top of financial, environmental, social and health costs. How should he explain his volte-face?

Lim Kit Siang made it clear that the only alternative is to have an efficient public transport system. This is a golden opportunity for these leaders to implement what they preached. The chief minister said at a town hall meeting on Sept 20 that the state is proposing a balanced approach to solving the transport problem: building roads and public transport.

Let us examine the actual facts.

1. Penang island presently has 2.8 times more highways on a per capita basis than Singapore (84m per 1,000 persons in Penang versus 30m per 1,000 persons in Singapore).

2. The state government under the PTMP is planning to build another 70km of highways, many of them elevated, marring the city landscape and thereby doubling our highway per capita to 4.5 times that of Singapore.

3. Presently Penang’s public modal share of transport is dismal at 5%, i.e., only 5% of people who travel use public transport, compared to 67% in Singapore.

From the above, it is clear that Penang’s transport situation today is totally tilted towards roads and against public transport. Hence a balanced approach must mean prioritising improvement of public transport and not the construction of more highways that encourage more private road use.

The primary objective of the PTMP is to raise public modal transport share to 40% by 2030. But spending RM15 billion on building highways in the first phase of the PTMP (RM8 billion on PIL 1 plus RM6.5 billion on the three paired roads and tunnel under the Zenith package) and RM8 billion on one LRT line is NOT a balanced approach.

In fact, under the Halcrow PTMP, an integrated public transport network consisting of trams, bus rapid transit, commuter rail and a new cross-channel ferry service was estimated to cost RM10 billion. But all these are shelved or relegated to future dates while priority is given to building highways. The chief minister must explain to the people of Penang why such an unbalanced approach is adopted. Is the policy based on scientific evidence or on other types of interests that we are unaware of?

The saying that “justice must not only be done but must be seen to be done” aptly applies in this case. The people of Penang must have clear and credible answers to dispel any possible misgivings.

I respect and have worked with Chow for the last 10 years on the Penang transport issue.

I recall what he told Koh: that if the findings of the EIA report are true then Koh would be irresponsible in pushing the PORR.

Now, in the case of PIL 1, the arguments are even stronger that this will not be a long-term solution to the traffic congestion on the island.

Source: FMT by Lim Mah Hui

Lim Mah Hui is a former professor, international banker and Penang Island city councillor.

The views expressed are those of the author and do not necessarily reflect those of FMT.

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Wednesday 19 September 2018

Wising up to a Billion Dollar Whale of a tale


Wising up to a whale of a tale

 

Once upon a time, Malaysians were enchanted with Jho Lows champagne lifestyle and proud that he had friends in high places. We now know better.


IF a poll was conducted to ask Malaysians to name their 10 most hated people, Low Taek Jho – also known as Jho Low – would surely be in the top five, if not three.

There has been a quick succession of books on the 1Malaysia Dev­elopment Bhd (1MDB) saga and in the one by two Wall Street Journal reporters, Billion Dollar Whale, Low is the central villainous character.

Yet for a brief shining moment, this man was the pride of his home state and the nation.

Then Penang chief minister Lim Guan Eng was reported as saying that he was proud to note the accomplishments of overseas Pen­angites, including this particularly “well-connected” fellow.

That was back in July 2010 when a mysterious Malaysian man of means started hitting the headlines for partying with the likes of Paris Hilton, and counted actors Jamie Foxx and Leonardo DiCaprio and singer Usher as his good friends.

When Hilton – the glamour party girl before the Kardashians overtook her – was detained by drug enforcement officers in Paris in 2010, she was reportedly travelling with “personalities close to power in Malay­sia”, Low being identified as one of them.

In just three months, his champagne-infused big spending ways – US$50,000 (RM206,800) or US$60,000 (RM248,190) a pop – set New York’s nightlife scene on fire and caught the attention of the US media. And that was how Low became famous.

Oh wait! He’s Malaysian, not some little emperor from Shanghai or Shen­zhen, so we puffed up with pride at the success of one of our own.

Somehow, the ability to party with the rich and famous became a yardstick for success. The assumption was that Low must have done something great to be so filthy rich and make such “friends”.

Low, then 28, became a subject of intense curiosity that Malaysian and foreign media wanted to know.

Then The Star landed an exclusive interview with him. The two hours with him provided enough fodder for stories spread over two days on July 29 and 30, 2010.

The interview covered topics like his Arab childhood friends and investors whom he said were the real big spenders, how he made his first million when he was just 20 and his expertise in setting up sovereign wealth funds.

Yes, we were pretty pleased with ourselves for beating the competition in getting Low to speak.

The interview was picked up by other newspapers and portals locally, regionally and internationally.

The Star took efforts to provide Low’s personal details like his age, birthplace, education and languages spoken.

What I also found amusing was that we also gave his height (1.7m) and his weight (88kg), which is not common for such interviews. That was probably our nice way of indicating how chubby he was.

The stories were positive pieces, painting Low as a successful role model. Of course, at that time, no one suspected that he was the mastermind behind the world’s biggest kleptocracy.

We were simply dazzled by his partying playboy high life and accepted in good faith all his claims on why he was successful: he went to the right schools, from Chung Ling to Wharton School of Business, made well-connected, influential friends (especially Arab royals) and got a great financial start.

As The Star reported: “At the age of 20, (he) started an investment company called The Wynton Group with US$25mil (RM103.4mil) from family and South-East Asian and Middle Eastern friends. The investment company in which he owns a stake is now worth in excess of US$1bil (RM4.1bil).”

Penang businessman Tan Sri Tan Kok Ping, a close family friend, described Low as a very bright person who respected his elders.

He was also “an active person, has a corporate brain and his public relations skills are equally good. He’s also quite a fast eater.

“I watched him grow up since he was a kid and I knew he was brilliant, but I never thought he would be so successful,” said Tan.

A reader who was so impressed by the Star exclusive blogged about his son having studied in Harrow in Bangkok and opined: “He (the son) is certainly no Jho Low, but I hope he can learn the positives from Jho’s life and work hard and be successful.”

Well, we now know better how Low operated and whose money he was spending on his celebrity friends and more.

From the man with the Midas touch, he has become the embarrassment no famous person wants to touch. I doubt Hilton or Usher takes his calls anymore. He is a fugitive on the lam, hunted by governments around the globe.

Much as he is furiously claiming innocence, he is indeed our billion-dollar whale. The whale is a metaphor in business, meaning to land large accounts that can transform a small company into a major player.

A whale can also mean a businessman who is close to a country’s regime, is protected by the state and receives government contracts and large bank loans without any collateral, as explained in the book, Why Nations Fail: The Origins of Power, Prosperity and Poverty.

The maddening fact is this portly plunderer is hard to find. He apparently has multiple passports, including one from St Kitts and Nevis.

It’s very possible he is no longer 88kg. He could be thinner or fatter – depending on whether stress makes him eat even more and faster – or had plastic surgery, grown or lost his hair, but he should still be 1.7m tall, unless he wears hidden heels in his shoes.

Our government has said it is not sure where he’s hiding, but with Malaysians in just about every corner of the world, can we not somehow tap into this vast network? Even a whale must surface for air somehow, somewhere.

What really got my goat was what he glibly said in the Star interview: “Ultimately, I am Malaysian. I am one who does not forget my country and I think there is a lot we can do for Malaysia. But when you build the trust of investors, you need to deliver what you promised.

“For me, we all work very hard. Of course, we have a disadvantage where at our age, people may perceive it differently. At the end of the day, I handle investors’ money prudently. I generate returns for them.”

And this: “I am not an excessive person. Excessiveness with alcohol is just not me.”

No, not in alcohol but his name is now synonymous with excessiveness in luxury acquisitions.

Oh, where’s Capt Ahab when we need him?

Aunty wants to remind all of us that truly, all that glitters is not gold. Feedback to aunty@thestar.com.my
Credit:  June H. L Wong, So aunty, so what?


Related posts:

Let me be clear, I am innocent: Jho Low

Goldman Lunch at Taste Paradise Sets Table for 1MDB Money Probe

 

Malaysia can’t extradite Jho Low, key people in 1MDB saga

 

 

Related:

Saturday 11 August 2018

Implications of the 'RM19bil GST collected, RM18bil taken’ and RM19.4bil shortfall !

https://youtu.be/Ew5Fk-ml6Mo 

The immediate concern is the budget deficit for 2018 spiking to 4% if the GST refunds are made this year


ON May 31, when Finance Minister Lim Guan Eng announced that the new government would be able to meet the budget deficit of 2.8% for this year, the sum of RM19.4bil that is to be refunded to companies since the goods and services tax (GST) was discontinued, never came into the equation.

Now, since that money is not in a trust account that was specifically set up to meet the refund obligations, does the government need to borrow more to ensure it meets the refunds? In doing so, would it incur a bigger budget deficit than had been envisaged?

There are wider implications on the shortfall of the RM19.4bil, assuming the refunds are to be done this year.

The biggest challenge for Lim is to cover the shortfall to maintain the budget deficit for 2018 at 2.8%.

The hallmark of the Pakatan Harapan government’s first 100 days of rule is to bring down the cost of living and cost of doing business. Towards this end, it has subsidised the price of petrol and diesel and removed the GST.

The cost of keeping up with the Bantuan Sara Hidup and subsidy for petrol and diesel is estimated to be about RM6.2bil between June and December.

Revenue loss due to discontinuing the GST from June 1 onwards is estimated at RM21bil.

The shortfall is made up of cutting down government expenditure by RM10bil, increasing dividends from government agencies such as Khazanah Nasional Bhd and Petroliam Nasional Bhd, a higher petroleum income tax of RM5.4bil and proceeds from the implementation of the sales and service tax from September onwards.

Nowhere was the RM19.4bil figure that is to be paid back to companies under the GST that was discontinued mentioned.

Lim has said that the money was supposed to be in the trust account, but is not there and has gone “missing”.

Former Finance Ministry secretary-general Tan Sri Mohd Irwan Siregar Abdullah has said that all proceeds from the GST went into the consolidated fund of the federal government. The amount to be refunded is allocated to the trust account monthly based on the requirements of the Customs Department and the financial position of the government.

Customs director-general Datuk Seri Subromaniam Tholasy has revealed that since the GST was implemented on April 1, 2015, the total refunds amounted to RM82.9bil and the amount allocated to the trust account from the federal government consolidated fund was only RM63.5bil – representing a shortfall of RM19.4bil.

Generally, refunds for the GST are to be done within 14 days. But the amount allocated is less because not all refunds are paid within the two-week period.

At times, refunds are held back up to one year, pending investigations. Hence, the cash allocated to the trust account maintained by the Customs and the Inland Revenue Board (IRB) is less than the total amount due for refunds.

For instance, in 2017, the amount allocated to the IRB trust account for refunds was RM7bil when the total amount to be refunded was more than that.

In the case of the Customs, the outstanding refunds for 2017 was RM15bil, but the amount allocated was less.

Under the previous government, the GST provided a steady flow of cash every month. The thinking was that the money for refunds should be allocated when it comes due to best manage the cash-flow position of the government.

However, the view of Lim is that money meant for refunds should have been put into the trust account, irrespective of whether there is a need to pay immediately or otherwise.

Hence, the issue is not really the question of the RM19.4bil meant for refunds going “missing”.

It is whether the money is still in the consolidated accounts or whether it has been utilised. If it was utilised, did the government have the right to use it for other purposes in the name of cash-flow management?

The bigger implication for the Pakatan government is how it is going to cover this RM19.4bil shortfall.

One of the ways the government can cover the RM19.4bil hole without increasing the deficit is to cut more of the excesses.

On this score, the Pakatan government has so far handled public funds in a more judicious manner compared to the previous government. It has cut down the budget for inflated infrastructure projects and stopped unnecessary spending.

The light rail transit 3 and East Coast Rail Link projects are only some examples. It has stopped prestigious projects such as the KL-Singapore high-speed rail and the less glamorous mass rapid transit line 3 project. The government of today has earned full marks for being transparent and diligent in handling public finances.

Despite declaring that the federal government debt is at RM1.07 trillion, business sentiment is at a seven-year high, while consumer sentiment is at a 21-year high.

The stock market is looking good so far, much better than the likes of China and Hong Kong, although the improved sentiments are likely to be temporary.

As for the ringgit against the US dollar, its performance is better against many of the Asian and emerging-market currencies. The tumbling of the Turksih lira and Russian rouble is testimony that the ringgit is not that bad after all.

The government can probe, produce a White Paper or do anything else to look into the RM19.4bil shortfall, but the bottom line is that Lim and Prime Minister Tun Dr Mahathir Mohamad will have to face the reality of making up for a RM19.4bil shortfall in government finances for this year.

Economists are predicting that the federal government budget deficit would be higher than the 2.8% estimated on May 31 this year on the assumptions are made this year. Some are looking at the budget deficit to be as high as 4%

Would there be an impact on Malaysia’s credit rating and the ringgit?

Yes, a spike in the budget deficit would have an impact for the short term.

However, the government of the day will score brownie points in its drive to bring about reforms and governance in the management of public funds. Rating agencies would appreciate any government that promotes transparency and improves on its finances purely by spending within its means.

So far, the government has done away with the GST and taken measures to put more cash into the hands of the people and business to improve domestic spending. The stabilisation of petrol prices and threemonth (June to September) tax-free period between the implementation of the GST and SST has put RM20bil into the hands of the people and businesses. This should help improve the domestic economy for a few months.

However, for the longer term, investors and rating agencies will be looking at how the RM19.4bil hole in the federal government finances will be covered. What are the government assets that will be sold?

Certainly, we are not looking at an expansionary budget come November this year.

Source:  The Alternative view by M.Sshanmugam The Star

RM19bil GST collected, RM18bil taken’




KUALA LUMPUR: The previous government has not been able to refund companies their tax credit that came about following the implementation of the Goods and Services Tax (GST) because 93% of the money was not placed in the correct account, Finance Minister Lim Guan Eng revealed.

He said some RM18bil of the RM19.4bil input tax credit under the GST system since 2015 was “robbed” by the previous administration.

“I was very shocked when informed that this happened because the previous government had failed to enter the GST collection in the trust account specifically meant for the repaying of GST claims.

“Instead, the Barisan Nasional government pilfered the trust account and entered cash GST collection directly into the consolidated fund as revenue to be spent freely,” he said when tabling the GST (Repeal) Bill 2018 during its second reading in Parliament yesterday.

He said that as of May 31, the outstanding GST refund stood at RM19.397bil whereas there was only a balance of RM1.486bil in the repayment fund.

Lim said from the total input tax credit, RM9.2bil or 47% was recorded between Jan 1 and May 31 this year, RM6.8bil or 35% in 2017, RM2.8bil (15%) in 2016, and RM600mil (3%) in 2015 (from April 1 to Dec 31, 2015).

Under GST, the input tax credit allowed businesses to reclaim credit for taxes paid on purchases, subject to filing of input tax documents.

In his winding-up reply, Lim said a comprehensive investigation would be carried out to determine the cause of the missing funds.

When debating the Bill, Lim also said he had asked for documents to show how the input tax had ended up in the consolidated fund.

“I asked the Chief Secretary to the Government for the Cabinet papers on the matter.

“However, he told me he could not remember anything of such,” he added.

Lim said former Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz, when told of the missing funds, said it was imperative that the money was returned to the claimants as it was fiscally moral to do so.

Later, at the Parliament lobby, Lim said a former Treasury secretary-general may have been aware of the missing RM18bil.

The previous government, he said, had committed wrongdoing over the missing funds.

“I would assume the previous KSP (ketua setiausaha perbendaharaan/Treasury secretary-general) would have known about this.

“We want something definite because we want to look at the circle of decision-makers,” he said.

By martin carvalho, hemananthani sivanandam, rahimy rahim, and loshana k shagar The Star

Khairy urges gov't to bring 'GST robbers' to book




BN MPs want Najib, RM18b GST 'robbery' claim investigated





Related 

GST refunds should be in trust account: ACCCIM - theSundaily

 

RM18b input tax credit under GST system robbed ... - The Straits Times

 

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Saturday 26 May 2018

Malaysia's RM1.09 trillion debt, 80.3% of GDP demystified

Analysts say new government needs to quickly introduce measures to reduce the country’s liabilities


ASSUMING the government repays its debt by RM1mil a day, it would take Malaysia 2,979 years to pay off its debts.

Malaysia’s new Prime Minister Tun Dr Mahathir Mohamad revealed on May 21 that the country’s debt level has breached the RM1 trillion mark during his first address to civil servants.

The statement, which was nothing less than alarming, has since raised concerns among Malaysians on the country’s fiscal sustainability. Bursa Malaysia was hammered for four consecutive days, as investors frantically sold off their stakes.

The benchmark FBM KLCI saw the biggest year-to-date decline on May 23, tumbling by 40.78 points or 2.21% to 1,804.25 points.

Total gains made by the index this year were all wiped out in just four days following Dr Mahathir’s announcement.

The ringgit, which has weakened since early April, continues to decline as concerns on public debt loom.

Big impact: The benchmark FBM KLCI saw the biggest year-to-date decline on May 23, tumbling by 40.78 points or 2.21 to 1,804.25 points.


An economist tells StarBizWeek that Dr Mahathir’s public announcement on the high debt figure is “not helping”, as anxiety intensifies among Malaysians and in the market.

For context, Malaysia’s real gross domestic product (GDP), an indicator of the size of economy, was RM1.35 trillion as at end-2017 – close to the said RM1 trillion debt amount.

Meanwhile, the federal government’s revenue this year is projected at RM239.9bil as per Budget 2018.

Several critics, including Umno Youth deputy chief Khairul Azwan Harun, claim that Dr Mahathir’s statement on the federal government debt was exaggerated and far-fetched.

AmBank Group chief economist Anthony Dass says that although the current scenario shows some signs of similarities to the 1997/98 Asian Financial Crisis, he would not conclude that the current fiscal condition is somewhat similar to the downturn 20 years ago.

At a glance, the “RM1 trillion debt” remark stands in sharp contrast to Bank Negara’s debt tally of RM686.8bil as at end-2017, putting the federal government’s debt-to-GDP ratio at 50.8% – lower than the 55% self-imposed debt limit.

Dr Mahathir refutes this, saying that the national debt-to-GDP ratio has shot up to 65.4%. A day after his announcement, Finance Minister Lim Guan Eng put the ratio at 80.3% of GDP, or about RM1.09 trillion in debt as at end-2017.

Why is there such an obvious difference in the debt amount now that a new government is in place?

Here is where “creative accounting” comes into play.

The lower official debt figures released under the previous Barisan Nasional government had excluded the contingent liabilities and several other major “hidden” debts from the direct liabilities, which amounted to RM686.8bil as at end-2017.

Contingent liabilities, which were released separately prior to this, basically refer to government-guaranteed debt and do not appear on the country’s balance sheet. Examples of contingent liabilities are the loans under the National Higher Education Fund Corp (PTPTN) and certain debt of the controversial 1Malaysia Development Bhd (1MDB).

As at end-2017, Malaysia’s contingent liabilities stood at RM238bil.

Funding for several government mega-projects such as the mass rapid transit (MRT) projects was also categorised as contingent liabilities. The MRT lines were funded by DanaInfra Nasional Bhd, the government’s special funding vehicle for infrastructure projects.

DanaInfra raises money from the market through sukuk, which are, in turn, guaranteed by the government. The guaranteed amount is classified as a contingent liability.

In the event of less-than-expected revenue collection from the MRT lines moving forward, the government will have to intervene to repay the sukuk holders.

The current ruling government believes that RM199.1bil out of the RM238bil contingent liabilities deserves attention to ensure proper debt repayment.

The 1MDB alone comes with an estimated contingent liability of RM38bil.

High figure: The 1MDB alone comes with an estimated contingent liability of RM38bil. — Reuters
High figure: The 1MDB alone comes with an estimated contingent liability of RM38bil. — Reuters 

On the remaining government guarantees, the Finance Ministry says they have been provided by “entities which are able to service their debts such as Khazanah Nasional Bhd, Tenaga Nasional Bhd and MIDF”.

Apart from contingent liabilities, there are several major “hidden” debts, which do not fall under both direct liabilities and contingent liabilities.

An economist with a leading investment bank in Malaysia calls the debts “off-off-balance sheet” government debt.

These are the future commitments of the federal government to make lease payments for public-private partnership projects such as schools, roads and hospitals.

Examples of such debt would include the debt of Pembinaan PFI Sdn Bhd, a company owned by the Finance Ministry. Pembinaan PFI was established in 2006 under the previous Tun Abdullah Ahmad Badawi administration to source financing to undertake government construction projects.

According to its latest available financial statement for 2014, Pembinaan PFI held a total debt of RM28.75bil.

Interestingly, at end-2012, the company’s debt was the third highest among all government-owned entities, just behind Petronas (RM152bil) and Khazanah Nasional (RM69bil).

With no independently generated revenue, the interest payments on Pembinaan PFI’s debts would eventually come from the federal government’s coffers.

The Finance Ministry puts the debt under this third category at RM201.4bil.

All together, Malaysia’s debt and liabilities are said to amount to a total of RM1.09 trillion.

Actually, for those in the loop, the different debt categories and total liabilities are not something new.

Lawmakers from Pakatan Harapan, particularly current Bangi MP Ong Kian Ming, have alerted the authorities about the debt figures over that past few years.

Ong is also currently the special officer to the Finance Minister. The layman might ask, what was the former government’s relevance of classifying these debts into separate off-balance sheet items?

The motive is to make sure the national balance sheet looks healthy and lean.

Economists’ take

Many have questioned the new government’s move to lump contingent liabilities and debt obligations with the direct liabilities. It should be noted that as per the standard procedure of credit rating agencies, only the direct liabilities are taken into the calculation of the debt-to-GDP ratio.

In a StarBiz report this year, Moody’s Investors Service sovereign risk group assistant vice-president Anushka Shah said that by carving out certain expenditures off its budget, the government would be able to optimise its expenditure profile and minimise the associated impacts from its spending.

However, she pointed out that Malaysia’s federal government debt burden remains elevated at 51%, relatively higher than the median of other A-rated sovereign states at 41%.

On the country’s contingent liabilities, Anushka described them as “low-risk” at the current level, and added that the government has been prudent and careful in managing the guaranteed debts.

“We find that the government has adopted rigorous selection criteria when it grants the guarantees to the respective entities.

“The companies which have received guarantees from the government are relatively healthy and have strong balance sheet positions,” she said.

Ever since Dr Mahathir shocked the market with the “RM1 trillion debt” remark, the focus among Malaysians has largely centred on the nominal value of the debt.

A greater emphasis should instead be given on “debt sustainability”, which basically refers to the growth of debt against the growth of the economy.

Economists who spoke to StarBizWeek have mixed opinions on the level of seriousness of Malaysia’s public debt problem.

Suhaimi: Malaysia’s debt has risen faster than economic growth.
Suhaimi: Malaysia’s debt has risen faster
than economic growth. 
According to Maybank group chief economist Suhaimi Ilias, Malaysia’s debt has risen faster than economic growth over the last 10 years.


“In the past decade, officially published government debt and government-guaranteed debt have risen by 10% and 14.5% per annum, respectively, faster than the nominal GDP growth of 7% per annum, which raises valid sustainability risk.“On the government’s debt service costs relative to the operating expenditure, the ratio was 12.7% as at end-2017 and based on Budget 2018 is projected to rise to 13.2%. It has been rising steadily from 9.5% in 2012.

“There is a 15% cap on this under the administrative fiscal rule, while the 11th Malaysia Plan target is to lower the ratio to 9.8% in 2020. The government is looking at the debt issue from this sustainability perspective in our opinion,” he says.


Lee: Malaysia’s rising public debt level warrants close monitoring.
Lee: Malaysia’s rising public debt level
warrants close monitoring.  

Meanwhile, Socio-Economic Research Centre (SERC) executive director Lee Heng Guie says that various indicators of debt burden suggest that Malaysia’s rising public debt level warrants close monitoring to contain the long-term risks of fiscal and debt sustainability.

“High levels of government debt over a sustained period will have economic and financial ramifications over the longer term. Rising public debt could crowd out private capital formation and, therefore, productivity growth.

“This occurs through the competition for domestic liquidity, higher interest rates, a shifting of resources away from the private sector or investment in low-impact projects. This situation is made worse if the government wastes borrowed money on unnecessary projects,” he tells StarBizWeek.

In contrast to Suhaimi and Lee, Alliance Bank Malaysia Bhd chief economist Manokaran Mottain points out that Malaysia’s debt sustainability scenario is yet to be a cause for concern.


Manokaran: Debt sustainability scenario is yet to be a cause for concern.
Manokaran: Debt sustainability scenario is
yet to be a cause for concern.
This is because debt repayments are made on an annual basis as opposed to a colossal one-off payment of RM1 trillion.

“Malaysia’s economic growth of above 5% is sufficient to cover government debt. As long as the economy is growing while the government is able to service the debt charges, it is not really that alarming.

“Even in the United States, the government debt-to-GDP level exceeds 100% at US$21 trillion against the real GDP of US$18.57 trillion,” he says.

Manokaran adds that while total government debt has risen over the years, Malaysia’s annual debt growth rate has been growing slower in recent years.

Deleveraging Malaysia

The government must now move fast to introduce measures to reduce and manage the country’s debt levels. This is highly crucial in assuring creditors and investors that the country’s fiscal health remains uncompromised.

Given the fact that the world is currently at the tail-end of the 10-year economic cycle, it is timely for the government to focus on its ability to fulfil its debt obligations.

In the event of an economic turmoil, a heavily-indebted country would be adversely affected.

Lim has emphasised the federal government’s commitment to honour all of the country’s debts.

“This new government puts the interest of the people first, and hence, it is necessary to bite the bullet now, work hard to solve our problems, rather than let it explode in our faces at a later date,” he said in a statement earlier.

Economists believe that the government must strictly embark on reforming the national expenditure in carrying out debt consolidation.

This includes cutting down on unnecessary expenditure, plugging leakages in the federal government’s finances and containing public-sector wage bills.

Lee has recommended an overhaul the current pension system, considering the unsustainable current trend.

“On revenue reform, the design of tax policy should be fair and equitable in order to be sustainable.

“The push for a wide and investment-friendly reform to boost potential growth should be expedited, as strong investment and economic growth has a huge effect on enhancing revenue growth and reducing public debt.

“On budget planning and development, an oversight body needs to be set up to ensure better fiscal rules, budgetary processes and closer fiscal monitoring to ensure fiscal discipline,” says Lee.

Manokaran says the new government should consider expenditure cuts through the privatisation and reformation of the numerous government-linked corporations, as well as the reduction in size and budget allocation of the Prime Minister’s Office.

On the national mega-infrastructure projects, Manokaran and Suhaimi say that the renegotiation and review of such projects will be vital in managing future debt growth.

Time will tell whether the government can live up to its promise of reducing the public debt dilemma. Pakatan must now balance its “populist” electoral promises and stellar fiscal management policies.

As for now, the government deserves to be complimented for calling a spade a spade, acknowledging the problem at hand.

By ganeshwaran kana The Star