ANY decision to dissolve parliament before Budget 2023 is tabled will significantly and negatively impact the country’s economy, Ong Kian Ming said.

The Bangi MP said speculation is rife that Prime Minister Ismail Sabri Yaakob will seek an audience with the Yang di-Pertuan Agong tomorrow, where he will ask for parliament to be dissolved the following day, prior to the tabling of next year’s spending plan.

Ong said leaders of all parties and MPs should do all in their power to appeal to the prime minister to allow for the budget to be tabled, debated, and passed in parliament before parliament can be dissolved.

“The first impact of non-tabling of the budget would be seen in the currency markets where the ringgit, already trading at a historic low of RM4.63 to US$1, will fall further,” he said.

“The ringgit will also likely fall against other currencies of our major trading partners, including the euro and the Singapore dollar. Imported inflation due to the falling value of the ringgit will also likely increase.”

The second impact, he said, will be increased borrowing costs for the Malaysian government due to an increased risk premium from political uncertainties.

Without a budget, domestic and foreign investors will have no guidance on the expected fiscal trajectory of the Malaysian government next year, including the Finance Ministry’s (MOF) strategy on managing government revenue and expenditure.

This, Ong said, includes the expected dividend from Petronas, additional revenue from changes in tax policies and the possible introduction of targeted subsidies in sensitive areas such as petrol and electricity.

He warned that without such guidance, foreign investors will err on the side of caution and sell Malaysian assets such as bonds and equities. Investors will also demand a higher interest rate on government bonds to account for greater uncertainty and higher risks.

“The third impact will be the inability of individual ministries and government agencies to align their policies to the budget.

“Since the budget document is not revealed to the other parts of government only until the budget speech, many ministries cannot confirm if their expenditure and policy requests to the MOF have been approved until budget day.

“Only AFTER the budget has been announced, including the publishing of more detailed line-item expenditures in the budget estimates for individual ministries, can each ministry confirm their policy plans for the upcoming year especially for ministries that have requested for new expenditure items to be approved,” he said.

Ong said while some have pointed to 1999 as a precedent for when a budget was tabled but not passed because of the dissolution of parliament, the economic and political conditions this year are very different from 1999.

“For GE15, with an additional six million new voters, the Election Commission will need more than three weeks from when parliament is dissolved to polling day.

“In addition, there is no certainty that one coalition will be able to secure a comfortable majority to form a government, which means it will take some time to form a government.

“The absence of a budget will only add on to the political and economic uncertainties in the post GE15 political landscape,” Ong added.

He also said most people can see that the only reason why Umno president Ahmad Zahid Hamidi wants parliament to be dissolved now, before the tabling of the budget, is to give himself more time before the eventual court judgment on the 47 charges he is still facing over the misuse of Yayasan Akalbudi’s funds totalling RM31 million.

“The negative impact on the country’s economy because of a delayed budget is the furthest thing from his mind as opposed to his own selfish interests.

“Extraordinary times call for extraordinary action. I hope leaders and parliamentarians from all parties can come together to make a stand that Budget 2023 should be tabled, discussed, and passed in the Dewan Rakyat and Dewan Negara, before parliament is dissolved for the 15th general election.” – October 5, 2022.