Kuala Lumpur, 8 September 2026: The Political Financing Convention 2026, organised by the Legal Affairs Division under the Prime Minister’s Department (BHEUU) with the support of Institute for Democracy and Economic Affairs (IDEAS) and International Islamic University Malaysia (IIUM) marked a continued collaboration in advancing political finance reform.

BHEUU’s engagement sessions and IIUM’s perception study show that there is a resounding call from experts, civil society organisations (CSOs), and the public for the enactment of a political financing legislation before GE16.

IDEAS, as the Secretariat of the All-Party Parliamentary Group (APPG) for Political Financing and drafter of the APPG’s Bill, acknowledges that there is broad agreement on the major elements required for robust political financing legislation as reflected in the bill and the findings of the two reports. These include a clear set of prohibited donors, donation limits with defined caps or thresholds, comprehensive reporting regimes, the establishment of an independent oversight body, and mandatory public disclosure of political financing information.

However, differences remain regarding the best implementation and enforcement approach for the proposed legislation. In particular, whether to provide public funding to political parties and the appointment, independence and mandate of the regulatory and oversight bodies.

Public Funding

Public perception of public funding for political parties was mixed. Roughly half of respondents remained hesitant about the use of government funds to finance political parties.

Public funding, however, is preferable to private rent-seeking as a means of supporting democratic integrity. It can reduce political parties’ reliance on  private donors while also providing a basis for strengthening the wider transparency and accountability framework under the Political Financing Act.  With more than two-thirds of countries globally implementing some form of public funding provision to political parties, there is no shortage of international experience for Malaysia to draw from in designing an appropriate model.

Regulatory and Oversight Bodies

There is agreement on the need for an independent oversight body to regulate political finance in the public interest. But specifics surrounding its composition and governance of appointment processes continue to be discussed.

Any regulatory or oversight bodies must be fully independent and granted the appropriate powers and functions to ensure effective enforcement, especially when regulating a sensitive area such as political finance. Institutions that are subject to political pressure, particularly where appointments are made solely by the Executive with little oversight from the Legislative branch, risks undermining public confidence, as witnessed in high-profile cases currently.

Recommendations from the APPG Bill

The APPG Bill presents concrete recommendations as political financing reform moves into its next phase:

• Allocation of public funding to parties based on the number of votes obtained by eligible political parties in elections proposes RM 120 million of public funding be distributed to political parties based on election vote shares. Additionally, RM 10 million will be distributed proportionally based on the number of women elected representatives of the eligible political parties.
• Establishing a Political Financing Commission that plays a regulatory role and a Parliamentary Committee on Political Financing with oversight powers over the Commission. The appointments to the Commission are  made through a nomination process from the Committee  to the Yang di-Pertuan Agong. Given that the Committee will consist of MPs from different parties reflecting the composition of the Dewan Rakyat, it would provide robust checks and balances against the Commission.

“Ultimately, the findings of the reports and the discussions at the convention demonstrate that Malaysians recognise the pressing need to regulate political financing. Political financing reform has been extensively discussed, but it has yet to translate into legislation. We urge the government to move beyond discussions and enact the Political Financing Act before the 16th General Election,” said Aira Azhari, IDEAS CEO.

For more information, the full APPG bill is available on IDEAS website.

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Download the Media Statement PDF File Here

For enquiries, please contact:
Ryan Panicker
Manager, Advocacy and Events
T: 03 – 2070 8881/8882 | E: ryannesh@ideas.org.my