Kuala Lumpur, 30 May 2024: The Institute for Democracy and Economic Affairs (IDEAS) calls for more comprehensive budget information and stronger parliamentary oversight following the release of the 2023 Open Budget Survey (OBS) results by the International Budget Partnership (IBP). The OBS, a crucial tool for assessing budget transparency, public participation, and oversight in 125 countries, reveals that Malaysia’s progress remains insufficient, underscoring the urgent need for significant improvements in budget governance. Despite a slight improvement in the transparency score to 48/100 from 47 in 2021, Malaysia still lags behind its neighbours such as the Philippines (75), Indonesia (70), Thailand (60) and Vietnam (51), signalling an urgent need for increased accessibility of budget information, particularly through timely online publication of essential documents. Similarly, efforts to enhance public participation and budget oversight have only shown minor progress, with scores of 28 and 43, respectively, showing minor progress from 26 and 39 in 2021, highlighting ongoing significant challenges in these areas.

“Although Malaysia’s transparency score has remained steady with just a 1-point improvement, we expect some improvement by the next round because the Public Finance and Fiscal Responsibility Act (PFFRA) was introduced last year, which mandates some important transparency requirements, such as publishing a mid-year expenditure performance report. We anticipate this year’s budget process to implement these disciplines. However, budget documents should also provide more substantive information to the public, especially on comparisons between borrowing estimates and actual outcomes, and more information on off-budget funds. More comprehensive pre-budget statements and mid-year reporting would enable MPs to prepare for a more informed budget debate and ensure accountability for the actual outcomes from proposed expenditure,” stated IDEAS CEO Dr Tricia Yeoh.

Weak legislative oversight, reflected in a score of 43 out of 100, shows the need for more empowered and active parliamentary committees to scrutinise the budget. “While we acknowledge incremental progress in certain aspects of budget governance, Malaysia’s standing in the OBS underscores the urgent need for comprehensive institutional reforms, particularly in parliamentary oversight which is extremely weak. Parliamentary committees should be empowered to scrutinise budget proposals and should examine and report on budget implementation.”

Despite initiatives such as pre-budget submissions, opportunities for public engagement remain restricted. Moreover, with a public participation score of just 28 out of 100, Malaysia faces hurdles in facilitating meaningful involvement of the public in the budget process. Alissa Rode, Senior Manager of Research at IDEAS and principal researcher for Malaysia’s OBS 2023, added, “Transparency is not just about the budget speech in Parliament once a year. It is about providing meaningful and substantive ways for the public to participate by providing avenues for civil society and the public to give feedback through Parliament, ensuring vulnerable groups are consulted, and reporting on meaningful outcomes from consultations.”

Budget information assessed for the Open Budget Survey 2023 was taken up to the cut-off date of 31 December 2022. The Open Budget Survey covers 125 countries that are home to 7.5 billion people and assess the openness and accountability of budgets that totaled more than $33.5 trillion in spending in FY 2022.  Transparency helps the public understand the government’s budget priorities; public participation mechanisms enable them to contribute to these priorities; and formal oversight of the budget from the legislature guides and scrutinises budget choices while audit institutions assess the legality, efficiency, and effectiveness of public spending.

For a summary of Malaysia’s 2023 OBS results, please visit: https://internationalbudget.org/open-budget-survey/country-results/2023/malaysia

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