KUALA LUMPUR: A balanced budget will be hard to achieve as the government is now faced with a debt load that has reached RM1 trillion.
Finance Minister Lim Guan Eng said that it will not only be difficult to reach next year, but the next few years.
He said that while the government wants to break even, it is being held back by financial constraints.
“At the same time, the government needs to balance the (country’s) development and management,” he said while debating the Supply Bill (Reallocation of Appropriated Expenditure) 2018.
Senator S Chandra Mohan had earlier called on the government to achieve a balanced budget by prioritising expenses related to maintaining the people’s well-being.
Lim responded that the government understands that development expenditure can raise the people’s quality of life.
But he explained that the budget is presenting a problem, as some funds which could be diverted to development have been categorised as ‘operating expenditure.’
“If the government changes the status of this expenditure, it will result in a disparity in our balance sheets and throw accounts into disarray.
“Now, we have to follow existing guidelines and formulas that were carried out by the former government.
“At this moment, this is difficult, because nearly 40 per cent of the RM270 billion budget have been used to pay emoluments and pensions – and next year, the payment could reach RM100 billion.
“(But) the government’s revenue is RM130 billion and that is not enough to support these expenses,” Lim said. © New Straits Times Press (M) Bhd