KUALA LUMPUR: The Public Accounts Committee (PAC) today expressed concern over the increasing trend in the federal government debt.

Following the release of the Auditor-General Report today on the federal government expenditure, PAC chairman Wong Kah Woh said the federal debt in 2021 was RM979.814 billion or 63.4 per cent of the gross domestic product (GDP).

This is about a RM100 billion increase from the year 2020 which was RM879.56 billion.

Wong revealed that 16.3 percent of revenue collection had been used for loan interest payments. 

"This means that for every RM1 of revenue collected, 16 sen is used for loan interest payments.

"The increase also caused the total liability of the federal government in 2021 to now amount to RM1.298 trillion or 84 per cent of the country's GDP," he said during a press conference at the Parliament building here today.

According to Wong, the information was revealed to him by Auditor-General Datuk Seri Nik Azman Nik Abdul Majid who was also present at the media conference.

When asked for his advice to the government regarding this huge debt, Nik Azman said while it is understandable that the government needed to borrow money due to the Covid-19 pandemic in 2020 and 2021, Putrajaya must now start taking prudent measures.

"If we look at the figures, the previous loans taken up were used for development expenditure, Covid-19-related expenditure, and to help the people affected by the pandemic.

"We understand all that, but we are worried about the increasing trend because this must not continue. Taking up loans should be a short-term measure so that we can manage it.

"For a long-term measure, this must not happen. We can't simply use new debt (loan) to pay our old debt," he said.

In 2021, Wong said the government took gross loans amounting to RM217.201 billion, an increase of 11.6 per cent from RM194.55 billion in 2020, of which 52.4 per cent or RM113.764 billion was used for the principal payment of mature loans.

He said gross loans transferred to the Development Fund amounted to RM62.317 billion, which is equivalent to 28.7 per cent of the total loans, while the transfer to the Covid Fund was RM38 billion or 17.5 per cent.

"Of the total RM62.317 billion transferred to the Development Fund, only RM40.994 billion (65.8 per cent) was used for development expenditure purposes, compared to RM37.530 billion (77.3 per cent).

"A total of RM12.612 billion (20.2 per cent) was used to bear PFI liability and guarantee commitments, and RM8.711 billion (14 per cent) was used for the purpose of classifying operating expenditure for development."