Kuala Lumpur, 21 July 2022: The All-Party Parliamentary Group (APPG) on Political Financing, represented by its Chair YB Fadhli Shaari (PAS – Pasir Mas) has submitted a motion to Parliament to table a Private Member’s Bill on Political Financing. The motion was submitted to the Secretary of the Dewan Rakyat on 13 July 2022.

The main objective of this Bill is to regulate political parties’ sources of funding either through public funding or private donations as a way to curb corruption and to make the process of financing politics more accountable. The Bill defines “political financing” as “the activity of sourcing funds for expenditure incurred during party activities and to sustain the party machinery. These activities include fundraising, costs of maintaining permanent offices, carrying out policy research, conducting polls and political education, running advertising campaigns for policies, and mobilising voters.”

The core contents of the Bill, among others, are;

1. Only political parties are permitted to receive donations in cash or in kind. 
2. A Parliamentary Select Committee on Political Financing and a Political Financing Commission shall be established. 
3. A Political Party Fund is established to administer public funding to eligible political parties to the sum of One Hundred and Thirty Million (RM 130,000,000.00) per year.  A political party is eligible to receive this fund if it gained at least two per cent (2%) of the total valid votes during an election. 
4. The Commission shall prepare a report in relation to the Fund, on all donations made to political parties in that year and submit the report and the Commission’s books and records of accounts relating to the Fund to the Auditor-General for auditing. 
5. The maximum amount of donations allowed from an individual is Fifty Thousand Ringgit (RM 50,000.00), from a company One Hundred Thousand Ringgit (RM 100,000.00) and from a group of companies Five Hundred Thousand Ringgit (RM 500,000.00) within a financial year. 
6. Government-Linked Companies (GLC) at the federal, state, or statutory body level as well as certain foundations are prohibited from contributing to political parties. 
7. Ten Million Ringgit (RM10,000,000.00) shall be distributed proportionally based on the number of women elected representatives of the eligible political parties.
8. A prohibition on receiving donations from foreign governments or foreign government agencies. 
9. Every donation from a permissible donor to a political party that is received during its financial year and accepted by a member of a political party or political party must be recorded in a donation report if to the Commission if it is a single donation more than Three Thousand Ringgit (RM 3,000.00) or any other prescribed sum; or if, when it is added to any other donation from the same permissible donor, the aggregate amount of the donations is more than Three Thousand Ringgit (RM 3,000.00), or any other prescribed sum.

Furthermore, the APPG believes that it is timely during this second sitting of the fifth term for this Parliamentary session to include the Political Financing Act as a key component of the reform agenda alongside the Anti-Hopping Act, the Parliamentary Services Act (PSA), further improvements to the Parliament Select Committees (PSC) as well as Constituency Development Funds (CDF).

Any discussion on a Political Financing Act is in line with the Prime Minister’s previous announcement on the 19th of May 2022 that the Cabinet has in principle agreed for it to be introduced as legislation and to be implemented. The APPG on Political Financing urges the Prime Minister and the Special Cabinet Committee On Corruption (JKKMAR) to consider this Bill and that the APPG is open to help facilitate future engagements with the relevant stakeholders.

It is in the best interest of all political parties in Malaysia for this Private Member’s Bill to be tabled and debated in Parliament. We also urge for senior leadership in all political parties to lead the conversation on how greater transparency can be introduced in managing their party’s finances. Ultimately, a Political Financing Act will level the playing field, professionalise politics and introduce more maturity in our political culture.

Frequently Asked Questions (FAQs)

1. Why did the APPG decide to submit a Private Member’s Bill?

Previous attempts to obtain the Bill that was drafted by previous administrations have been unsuccessful. Thus, we decided to use the APPG platform to draft a new Bill based on the research that has been done on the topic since 2009. 

       2. Why does the Bill propose RM130 million to be allocated as public funding for political parties? 

The sum of RM130 million is obtained by taking the median from the last 10 years of the federal budget and multiplying it by 0.05%. 

       3. What are the criteria needed and processes involved to be selected into the Political Financing Commission? 

The Commission shall be appointed by the Yang di-Pertuan Agong after consultation with the Committee on Political Financing. The membership shall consist of a Chairman, a Deputy Chairman and five other members serving a term of 6 years and they shall be eligible for reappointment for a further term of 6 years. In appointing members of the Commission the Yang di-Pertuan Agong shall have regard to the importance of securing a Commission which enjoys public confidence. 

       4. What are the Commission’s role/duties and the scope of their powers? To what extent are they allowed to penalise political parties? 

The duties and scope of the Commission’s powers are: 

a.       To demand from a political party any information as may be required for the implementation of the Act

b.       To impose a warning, fine or compound pursuant to the provisions of this Act; and forfeiture of any non-permissible donations

c.       Powers of investigation, review or appeals

        5. What are the penalties for contravening the Act? 

Any person or political parties who contravene this Act shall be liable to a fine not exceeding Ten Thousand Ringgit (RM 10,000.00) or a term of imprisonment not exceeding 6 months or both.

Download letters of support here

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For enquiries, please contact:
Aira Azhari, Senior Manager, Democracy and Governance
T: +603 2070 8881/8882 | E: aira@ideas.org.my

Louis Denis, Manager, External Relations
T: +603 2070 8881/8882 | E: louis@ideas.org.my

About the APPGM on Political Financing

The APPGM on Political Financing was approved by the Dewan Rakyat on 20 April 2022. The main objective of the APPGM is to establish a platform where MPs, Senators and CSOs can deliberate and discuss the importance of political financing reforms in Malaysia.

APPGM on political financing members

Members of Parliament

1.     YB Tuan Ahmad Fadhli bin Saari (PAS -Pasir Mas)

•   Chairman

2.     YB Tuan Ahmad Fahmi bin Mohamed Fadzil (PKR – Lembah Pantai)

• Deputy Chairman

3.     YB Puan Wong Shu Qi (DAP – Kluang)

• Secretary

4.     YB Datuk Seri Panglima Wilfred Madius Tangau (UPKO – Tuaran)

•   Treasurer

5.     YB Dato’ Sri Saifuddin bin Abdullah (PPBM – Indera Mahkota)

6.     YB Dato’ Seri Utama Mukhriz bin Tun Dr. Mahathir (Pejuang – Jerlun)

7.     YB Datuk Seri Haji Ahmad bin Haji Maslan (UMNO – Pontian)

8.     YB Tuan Syed Saddiq bin Syed Abdul Rahman (MUDA – Muar)

9.     YB Tuan Larry Soon@Larry Sng Wei Shien (Parti Bangsa Malaysia – Julau)

Senator

YB Puan Fadhlina binti Dato’ Sidek, Pulau Pinang (PKR)

CSO Members

1.      Institute for Democracy and Economic Affairs (IDEAS) (Secretariat)

2.      Agora Society

3.      Bait Al-Amanah

4.      Pusat untuk Memerangi Rasuah dan Kronisme (C4)

5.      Engage Network

6.      G25 Malaysia

7.      Gabungan Pilihanraya Bersih dan Adil (BERSIH)

8.      Rasuah Busters

9.      Transparency International-Malaysia (TI-M)

10.    Malaysian Bar Council

11.  Puan Maha Balakrishnan (Pakar)

12.  Prof. Wong Chin Huat (Pakar)