A great day but be careful with the RM 1 trillion number

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Today is a day few people ever dreamed happening. Guan Eng as Finance Minister entering the top floor of the Treasury, Wan Azizah taking her seat as Deputy Prime Minster and even Mat Sabu inspecting the guard of honour at Mindef.

Yes, today is the day Pakatan Harapan took control of Malaysia.

However there are 2 things that need to be mentioned. The first is this RM 1 trillion debt number that is being mentioned. If this is indeed the current outstanding Federal Govt debt, then it is a major shock and could trigger a Greek style crisis.

After all, the ingredients are there. Debt hidden in off balance sheet accounts, large deficit, restatement of accounts. Hope PH is very careful about this.

Secondly, there needs to be a monitoring unit to ensure that once GST is removed, producers and suppliers actuallly reduce prices. One way is to have a high powered committee chaired by the DPM to monitor this. Remember, prices are sticky so you need firm actiom to ensure that the rakyat actually enjoys the benefits.

Updated:

Tun has clarified that the debt to GDP is 65% ratio. Not so bad compared to other countries but almost certain to result in a sovereign ratings downgrade due to the restatement of figures. BBB rating is my guess, same with Indonesia. New Govt needs to act fast to provide all the facts and figures, especially whether the Govt can maintain a primary surplus.

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