AS reported on Friday, the government announced one of the biggest budgets in the history of Malaysia, allocating RM372 billion in federal spending.

Every budget is essentially a supply bill, before it is passed into law as the supply act. The bill must contain the estimated financial requirements for the year concerned, according to article 100 of the Federal Constitution.

As provided under the Dewan Rakyat Standing Order 65, the details of these financial requirements in the draft estimates of federal expenditure for the succeeding year must be laid “upon the table before the introduction into the House”.

The Supply Bill, or better known as the Budget, must be passed by parliament and assented to by the king. The bill then becomes an act of parliament, a federal law that authorises the government to spend.

All government revenues and monies received must be accounted for in the Consolidated Fund, under article 97 of the Federal Constitution.

Article 97(1) of the Federal Constitution, states as follows: “All revenues and monies raised or received by the federation shall subjected to the provisions of this constitution and of federal law to be paid into and from one fund. This fund is known as the Consolidated Fund.”

Article 97(2) states that all revenues and moneys howsoever raised or received by a state shall, subjected to clause (3) be paid into and from one fund. This is known as the Consolidated Fund of that state.

The Federal Constitution protects and safeguards the federal Consolidated Fund in a number of ways.

First, article 98 of the Federal Constitution lays down the expenditure charged on the Consolidated Fund, which are:

• There shall be charged on the Consolidated Fund, in addition to any grant, remuneration or other moneys so charged by any other Article or federal law-
  • all pensions, compensation for loss of office and gratuities for which the Federation is liable;
  • all debts charges for which the Federation is liable; and
  • any moneys required to satisfy any judgment, decision or award against the Federation by any court or tribunal.

Second, article 99(1) of the Federal Constitution, requires the annual finance statement, to be laid before the Dewan Rakyat.

This is a statement of the estimated receipt and expenditure of the federation for the year.

Unless parliament otherwise provides, that statement shall be laid before the commencement of that year. This explains why Budget 2023 must be laid and passed before the commencement of year 2023.

Article 99(2) stipulates the estimated expenditure shall show:

• the total sums required to meet expenditure charged on the Consolidated Funds, and
• subject to clause (3), the sums required to meet the expenditure for other purposes proposed to be met from the Consolidated Fund.

Third, article 104, authorised withdrawals from the Consolidated Funds, provides as follows:

• Subject to clause (2), no money shall be withdrawn from the Consolidated Fund unless it is:
  • charged on the Consolidated Fund; or
  • authorised to be issued by a Supply Act; or
  • authorised to be issued under article 102 (authorised on account or for unspecified purposes).

Clause (1) does not apply to any such sums as mentioned in clause (3) of article 99.

No moneys shall be withdrawn from the Consolidated Fund except in the manner provided by federal law.

The Federal Constitution protects and safeguards the Consolidated Fund. In short, the Consolidated Fund is protected by requiring the government to spend as authorised by Parliament.

As such, Budget 2023 is a requirement under the Constitution. This is for MPs to be introduced to and eventually debate on the proposed expenditure before passing it to become a supply act.

Now, article 101, allows the government to table a supplementary supply bill if:

• the amount appropriated by the Supply Act for any purpose is insufficient, or that a need has arisen for expenditure for a purpose for which no amount has been appropriated by the Supply Act; or
• that any monies have been expended for any purposed in excess of the amount (if any) appropriated for that purpose by the Supply Act,
• a supplementary estimate showing the sums required or spent shall be laid before the House and the purposes of any such expenditure shall be included in a supply bill.

It underscores the requirement that government spending must be approved and authorised by parliament.

The Federal Constitution clearly provides on how and in what manner the Consolidated Fund can be used by the government.

This ensures a responsible government that spends as authorised by the people for the people. – October 10, 2022.

* Matilda George reads The Malaysian Insight.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.