Malaysia to slash ministers' salaries, review projects in bid to cut debt

Malaysia will try to cut its national debt of $251.67 billion, some 65 percent of GDP, by aborting or reconsidering some projects and cutting ministers' salaries, Prime Minister Mahathir Mohamad said on Wednesday.

Mahathir, 92, led an opposition coalition to a shock victory in elections this month after campaigning on rising living costs and a promise to clean up corruption at the highest levels of government.

Mahathir said the national debt of Southeast Asia's third-largest economy was 65 percent of GDP, and earlier this week blamed abuses by the previous government, led by the ousted premier Najib Razak, for the ballooning figure.

"I've been informed that our debt is actually $251.67 billion (1 trillion ringgit), but today we were able to study and look for ways to reduce this debt," he said at a press conference.

Mahathir added that cabinet ministers' salaries would be cut by 10 percent and that his government would decide "very soon" on whether to continue with the Singapore-Kuala Lumpur high speed rail project.

"This will be managed by the finance minister and in our downsizing process, no one with lower salaries will be affected," he added.

Najib denies wrongdoing

Najib has said previously the national debt was below his government's self-imposed ceiling of 55 percent of GDP. 

But Mahathir has said many of the figures recording the country's financial position may be false.

Najib faces a graft probe into a multi-billion dollar scandal at state fund 1Malaysia Development Berhad (1MDB). 

Since his electoral defeat, authorities have searched properties owned by Najib and his wife, Rosmah Mansor, and seized cash and items, including jewellery and luxury handbags, estimated to be worth millions of dollars.

Private search for MH370 to end

Meanwhile, Malaysia's new transport minister said the search for Malaysia Airlines flight MH370 by a private US firm will end on Tuesday next week and there will be no more extensions.

Houston-based Ocean Infinity has been searching for the aircraft that disappeared en route from Kuala Lumpur to Beijing on March 8, 2014, with 239 people on board, in one of the world's greatest aviation mysteries.

"This morning I raised this in cabinet and agreed to extend to May 29," Anthony Loke told reporters. Asked if that meant no more extensions, he said: "Yes."