The fight for a transparent political financing system is not new. Since 2011, various groups have proposed recommendations to reform political financing, from Transparency International-Malaysia, G-25 and the National Consultative Committee on Political Financing. Some progress has been made over the years, which resulted in a Bill being drafted under the Pakatan Harapan (PH) administration. The Bill was set to be tabled in early 2020. However, the Sheraton Move that triggered a change in government occurred at the end of February 2020 and PH lost power.

This paper provides an important update on the developments surrounding political financing in Malaysia. The unstable political conditions that Malaysia has undergone over the past two years indicate that there is a need for laws that provide for greater stability and institutionalisation of a party system. To this end, while we believe that a Political Financing Act is urgently needed, many other problems continue to inflict Malaysia’s political system, and passing the Act might not be adequate in tackling these problems. These four problems are – large businesses owned by political parties, the imbalance of wealth between political parties, established informal practices in Malaysian politics and internal party elections. This paper will examine these four challenges in turn. Policymakers seeking to enact such a law must seriously address these challenges, in order to ensure that the Act is implemented with holistic considerations in mind.