RM200 billion in national debt can be reduced by slashing certain projects, said Prime Minister Dr Mahathir Mohamad, following concerns about high debt due to the loss of revenue from scrapping a consumption tax.

Doing away with the goods and services tax was among Pakatan Harapan’s promises to ease the people’s burden.

He told business weekly The Edge that the government’s focus now, two weeks after coming into power, is to “downsize the financing of the government”.

“By doing away with expensive projects, we are already reducing (debt) servicing costs. By reducing the cost of government, we should be able to manage.

“In terms of reducing debt, I can see that at one go, we can reduce it by RM200 billion by doing away with all these huge projects.”

The PH chairman was asked how the government is going to handle high national debt, which it had put at RM1 trillion, amid moves to zero-rate GST, reintroduce petrol subsidies and review toll charges, all of which would affect revenue.

In the interview, Dr Mahathir reiterated the government’s plan to review costly projects, such as the East Coast Rail Line, and drop the Kuala Lumpur-Singapore High-Speed Rail (HSR) project.

He said the government will look into ways to reduce penalties incurred for scrapping the HSR project.

He also gave an assurance that government operations will not be crippled as it seeks to clean up the excesses and corruption of the previous administration.

“The operations of government will not be crippled. We will be very careful about our spending. We want to keep within our income, and our income is very big now. Luckily for us, the price of oil has gone up.

“It’s all about careful spending.” – May 26, 2018.