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IDEAS: MoF must provide fiscal transparency following Budget 2021 amendments

Kuala Lumpur, 30 November 2020 IDEAS welcomes the fact that Budget 2021 is being subject to scrutiny and amendment in line with the democratic process. Following the debate, a number of amendments to the budget have now been proposed. However, it is vital that any and all amendments, especially that are proposed by the Minister of Finance on last Thursday (26 November 2020), are fully transparent. Specifically, how new spending will be funded and what is the impact on debt and the deficit. Malaysia has gradually improved its budget transparency score but still needs to improve in many areas.

The committee-level debate is taking place without clarity over the final amount in the supply bill. IDEAS CEO Tricia Yeoh commented, “The Minister of Finance in his closing speech for the policy level debate on Thursday announced additional allocation for some items in the budget. Among them are allocations for eBelia, frontliners, as well as the fishermen. Based on the speech, the total additional allocation is more than RM100 million. While this additional allocation may be welcomed by the recipients, the Minister did not specify which budget line this allocation would come from. If additional allocation for eBelia is taken from the Minister of Youth and Sports’ allocation, the final amount allocated for this Ministry in the Supply Bill should be increased. If this allocation is taken from the additional RM17 billion COVID-19 fund, this should be clarified to the public.”

From whichever sources these additional funds come from, IDEAS calls for the Minister of Finance to provide information about which expenditures in the Supply Bill are affected by these additional allocations. “The information is needed because the additional allocation will affect the deficit level as well as the amount of debt needed to cover the shortfall. The current government’s commitment to be responsive to the rakyat’s needs should also include passing the budget with a certain level of transparency”, Tricia added.

Separately, IDEAS welcomes the Minister of Finance’s announcement that JASA (or J-KOM) funds will be reduced, but he did not say by how much. We also laud the efforts of some MPs to reduce the funding for JASA, including the suggestion to reallocate the excess funds to more urgent needs, such as to the Ministry of Health. Starting from yesterday (30 November 2020) until 15 December 2020, the Members of Dewan Rakyat are debating the budget at the committee level. In this period, the MPs can propose to reduce allocation for any expenditure. The standing orders, however, only allow Ministers to reallocate expenditures from one purpose to another. The Minister of Finance and government should therefore clarify how much the JASA allocation is being reduced by and where reallocations are being made. When the vote is taken for the Ministry of Communications and Multimedia budget, the total amount must therefore be announced.

Finally, it is hoped that the government takes fiscal transparency seriously, especially in its intention to table the Fiscal Responsibility Act in 2021. “I hope that the Ministry of Finance will work closely with external stakeholders, including think tanks like ours, in the process of formulating the details of the Fiscal Responsibility Act. Fiscal and budgetary transparency is imperative points to include in any legislation regarding fiscal responsibility”, Yeoh concluded.

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2020-12-08T16:34:48+08:00 1st December 2020|Media Statements|Comments Off on IDEAS: MoF must provide fiscal transparency following Budget 2021 amendments