THERE is an urgent need for the national budget to have more more parliamentary oversight and governance, a think tank said today.

The Institute for Democracy and Economic Affairs (IDEAS) said this was revealed in a recent survey by the International Budget Partnership

IDEAS chief executive officer Dr Tricia Yeoh said the 2023 Open Budget Survey (OBS) showed that Malaysia lacked budget governance.

The OBS is a tool for assessing budget transparency, public participation, and oversight in 125 countries.

In the latest survey, Malaysia showed a slight improvement in the transparency score to 48/100 from 47/100 in 2021.

However, Malaysia still lags behind its neighbours such as the Philippines (75), Indonesia (70), Thailand (60), and Vietnam (51), signalling the need for better access to budget information, particularly through online publication of essential documents.

Efforts to enhance public participation and budget oversight have only shown minor progress, with scores of 28 and 43, respectively. The scores were 26 and 39, respectively, in 2021.

“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 was introduced last year, which mandates some important transparency requirements, such as publishing a mid-year expenditure performance report,” Yeoh said.

“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.”

Yeoh added that more comprehensive pre-budget statements and mid-year reporting would enable members of parliament to prepare for a more informed budget debate and ensure accountability for the actual outcomes of proposed expenditure.

The survey also showed weak legislative oversight, as reflected in a score of 43 out of 100.

Yeoh said this 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.”

At present, the government undertakes initiatives such as pre-budget submissions but opportunities for public engagement remain restricted, said Yeoh.

She said 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.

“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,” said Alissa Rode, senior research manager at IDEAS and principal researcher for the Malaysia OBS 2023.

The budget information for the survey was from the year 2022.

Malaysia’s 2023 OBS results can be viewed here. – May 2, 2024.