PETALING JAYA, December 26th: Strategic Director of the People’s Justice Party (PKR), Ramli Rafizis slammed the Finance Ministry’s statement alleging that he was winding up the issue of selling government assets.
Rafizis said that the ministry only gave the reason that the sale of assets and securitization of government employees housing loans is common practice, but did not deny the report of the World Bank in a number of things.
In the past week, Rafizis revealed a World Bank report which states that the Central government was selling national assets to maintain the deficit at 4% of the gross Domestic Product (GDP)as set by the Prime Minister, Datuk Seri Najib Razak.
Additionally, the World Bank report also touched on the central government’s revenue of which RM1.4 billion was attributed to sales of national assets and RM4.2 billion from debt securities of a national asset.
“The Ministry did not deny those statements and merely mentioned the usual comments. Why not answer those questions in the context of the World Bank’s report?”
“This shows that the Ministry of Finance cannot deny the facts highlighted in the World Bank’s report which presented the Najib administration’s desperate attempt to maintain the target deficit,” he told reporters at PKR headquarters here today.
Rafizis said that the actions of the ministry in not deny the report proves that the federal government acknowledges the truth in the report and that state assets have been sold and pawned for unplanned revenue in order to keep the target deficit.
He added that the method of government staff housing loan securitization will continue to be used as an easy way to generate income, however this will affect borrowers.
“Of course they (ministry) said it is not the primary source, and only accounted for 1.9 percent of the central government’s revenue. However, RM1.4 billion is a great amount that could have been used for many different things.
“They need to understand that though the practice started in 2004, the securitization of housing loans is one of the causes of the subprime financial crisis which hit the United States in 2007 and 2008,” he said.
Rafizis explained that this method is not without risks as loans for homes purchased by the borrowers are sold in a secondary market to unknown investors.
“Securitization involves selling government staff housing loan portfolios to investors through the issuance of government bonds. This means indirect government employees owe the investors who buy bonds issued through securitization,” he said.
Rafizis said that the only way to achieve a deficit of four per cent as announced by Najib is by the unplanned selling and pledging of more government assets as they were not included in the 2013 Budget presentation.
“The fact that the federal government has to sell State assets and mortgage loans proves the desperate financial management under the leadership of Najib,” he said.