Nobody takes Malaysia’s Budget seriously and here’s why

October 24, 2016

Nobody takes Malaysia’s Budget seriously and  here’s why

by T K Chua

“It is simple; the annual budget can’t instil discipline if there is no oversight. The annual budget can’t function as an instrument of control if borrowing and off-budget activities are allowed to roam free, unrestrained and unchecked.”–T K Chua

Image result for Najib's 2016-2017 Budget

When I read “Why I didn’t watch the Budget speech” as written by Kensi from Sarawak, I found my feelings were the same. For the first time in a quarter century I did not sit through the whole Budget speech. I walked off after the first hour or so.

The Budget has long lost its aura. It is just an annual pomp for fund managers to get excited and for the government to announce some goodies. Whether or not the goodies are carried out as planned is as good as anyone’s guess.

Image result for Najib's 2016-2017 Budget

Malaysia’s National Budget is Petty Cash for this First Couple. When the cash is finished, just borrow more or ask Bank Negara to print more money and then pass the burden to ordinary Malaysians by way of debt service or inflation. That is Najibonomics: Tax and Spend recklessly.–Din Merican

Why do I say our federal budget is meaningless?First, the annual budget has never capped the amount of borrowing that the federal government could incur each year. If the federal government may borrow without restraint, who bothers whether our projected revenues and expenses are adhered to? If revenues fall short, the government could borrow more to fill the gap. If expenses burst the budget, again the government could borrow more.

Where are the restraints and control that the annual budget is supposed to provide? In fact, the annual supplementary budgets are clear indications that the budget has failed to keep government financial indiscipline in check. The government will borrow and spend as it wishes, regardless of the revenue performance or actual expenditure incurred.

Second, the annual budget is just a mechanism to dish out allocations, but never to accomplish its intended outcomes. We mistakenly look at the allocation earmarked for each programme as if it is a fait accompli.

But this is far from true. For example, just look at the allocation for subsidies which the government has always bragged about. It is time for the government to list out how much of the allocation has reached the intended target groups and how much of it was siphoned off by corrupt officials, businessmen and those who could indulge in arbitrage.

Seriously, if budget spending has been constantly effective over the years, I believe there would be no more poor people in this country.

Image result for Najib's 2016-2017 Budget

Third, the annual federal budget is no longer the true representation of government financial commitment and responsibility. Off-budget agencies and activities have now overwhelmed traditional government ministries and departments.

Parliamentary oversight of government taxation and expenditure through the annual budget is at best only half correct.

When non-financial public enterprises and GLCs set up ventures, incur debt and impose contingent liabilities on the government, did they get the approval of Parliament to begin with? When government decides on privatisation projects, including guaranteeing revenues and profits of privatised entities, did it seek the approval of Parliament?

Image result for Najib's 2016-2017 Budget

This guy is excited about the Budget–He is the Minister of Defense: Commissions

I thought the Federal Constitution, (through Part VII – Financial Provisions), is very clear on financial oversights by Parliament – no taxation shall be levied or expenditures incurred unless with expressed authority of federal law. How then did the government spend and borrow so massively through off-budget agencies such as GLCs and Non-financial public enterprises?

It is simple; the annual budget can’t instil discipline if there is no oversight. The annual budget can’t function as an instrument of control if borrowing and off-budget activities are allowed to roam free, unrestrained and unchecked.

T.K. Chua is an FMT reader.

25 thoughts on “Nobody takes Malaysia’s Budget seriously and here’s why

  1. Najib’s budget speech will include quotes from the Koran and pantuns. That will impress the people in our heartland. I do know how times he has used or uttered God’ s name in this Budget Speech. I did not care since I did not bother to listen to his bull. What do these simple folks know about his budget? Give them crumbs and they will be happy To them, kerajaan perihatin dan berjiwa rakyat. Kena tipu pun okay.–Din Merican

  2. The Budget is meaningless and official statistics (such as the inflation rate, poverty in the country etc) are hard-to-believe.

  3. Din , I posted something on the bidet on your lovely wife’s FB, saying the Budget debate was just a big show and Najib will spend as he likes.

  4. Election in Malaysia is coming sooner than expected. This 2017 Budget is obviously an election budget. It is providing a range of goodies such as increases in annual cash assistance to poor Malays and infrastructure projects for rural folks, and allowing civil servants to buy homes at discounted prices. The whole budget is obviously aiming to continuing buying off votes of rural Malays and to win back votes of urban Malays.

    Din, my friend, you and I are best suited in the academia and research world. I was a student of Professor Aaron Wildavsky, a renowned scholar in budgeting. What I remember most from his class is his “A Recipe for Violence”:

    “Promise a lot; deliver a little. Lead people to believe they will be much better off, but let there be no dramatic improvement. Try a variety of small programs, each interesting but marginal in impact and severely under-financed. Avoid any attempted solution remotely comparable in size to the dimensions of the problem you are trying to solve. Have middle-class civil servants hire upper-class student radicals to use lower-class Negroes as a battering ram against the existing local political systems; then complain that the people are going around disrupting things and chastise local politicians for not cooperating with those out to do them in. Get some poor people involved in local decision-making, only to discover that there is not enough at stake to be worth bothering about. Feel guilty about what has happened to black people; tell them you are surprised they have not revolted before; express shock and dismay when they follow your advice. Go in for a little force, just enough to anger, not enough to discourage. Feel guilty again, say you are surprised that worse has not happened. Alternate with a little suppression. Mix well, apply a match, and run….”

    His whole satire argued that trial and error, rather than the precautionary principle, is the best way to manage risks. May my late professor rest in peace.

  5. Thank you immensely Sdr. Merican for your very enlightening and informative reviews. Awareness education of the masses to help them take ownership of what becomes of their future is crucial…in developing a PEOPLE who is mature, able to stand up to injustice and act as a check and balance for Government to carry out its duties with integrity, accountability and transparency!
    Otherwise we will simply remain an immature lot, satisfied with the little crumbs thrown out way…never understanding, never questioning and never able to rise above our conditions.

  6. // Guess I typed the below last year. Guess no one did that. Time to move on… to the next step of Layu-layu.

    To the rakyat, do not be worried. Have faith. This is a definitely not a Government which you can rely on your future.

    Have the courage, be a knight of faith! Walk out from this phoney authority😝😎

  7. I feel sad that Malaysia has gone down this path of self destruction. The wealth that God has bestowed over this blessed land has been plundered and ravaged by ruthless politicians and their cronies for decades. Wealth that was meant for ordinary Malaysians to lead a better life. Malaysia is now experiencing one of its worst nightmare – a kleptocrat leader who will only serve the interest of himself, his families and cronies. He is the exact replica of Bashar Alassad of Syria who will rather bring the country to the brink of destruction than to give up power. He has caused his father’s legacy to be shredded to pieces. Welcome to the new order of Malaysia aka Syria.

  8. An old friend called and asked my views on Jibby’s budget speech. I replied l had none. He was surprised by my answer.

    What is there to answer as the Pekan walla never explained where and how he’s going to get the money to foot the bills.

    Borrowing, like Pak Din has described, will be his way out. It has come to a stage where federal budgets don’t excite me anymore knowing fully well what the thieving couple would do to get their hands on untold wealth.

    They treat the country’s coffers like their very own. You and I don’t matter so long as BRIM handouts are available to the dumbos in the kampong.

    This is the state of affairs in our country today. After all the great Madey did say once to keep the rural folks poor and illiterate so they’d forever be beholden to Umno.

  9. In a Nutshell, Nothing Gets Done.

    It is the Twisted Delivery System that had been working to Serve the Political Leaders, dominantly the UmnoBaruputeras, rather the people and the nation.

    The system had been deeply rooted with the scandalous culture of Money politics, Abuse of power , Corruption , Cronysm and Puppetry (MACCP). I blame principally TDM and secondarily Dsai for allowing it to propagate surreptitiously during their reign.

    They had the absolute power to Stop or brought it down to near zero or manageable level. But they did Not.

    Ousting D Najib is Not the solution( condoning),unless the whole system is reformed or replaced with one of quality leaders who subscribe and are committed to practice Accountability, Competency, Good Governance and Transparency for the benefits of the people and country.

    Many have lost faith not only with power that had been or that be and the oppositions, and the supposedly Independent Bersih, all of which had lost their compasses.

    Budget or no budget, What next?

    Najib himself ? and or MPs of the Divide, Sarawakians and the Sabahans?
    Who can the people really trust but the votes we have, and even that are being fearful of ” rigging”?

  10. There is no reason to get excited because the Budget is presented by A CROOK and a CRIMINAL and those that sits on his side are assesory to the crimes. What is there to listen to?

  11. The annual budget has become such a sham, it has lost all its value as an annual plan of where the nation shouldgo in the coming year. Any figures cooked up in it are rapidly made redundant by the supplementary budget which have become as certain as the rising sun. Methinks bolehland’s finance ministry officials, besides their woeful English, are also unable to count.

    The only reason this annual sandiwara is played out is because it gives the chief thief an opportunity to make silly pantuns and to hit at the opposition. And every time he does that, his bunch of merry beroks turn the Dewan into a veritable zoo with their childish behavior and thumping of the tabletops.

  12. Housing for the lower end of our citizens has to be looked at as a Special Project based on needs and not supply and demand. A Low Cost Building Industry based on automation is an idea whose time has come.

  13. There is no more Credibility left in MO1, PM and Mof that the rakyat dont pay much attention to the Budget. Its a “more of the same” s***t every year. Its like a daytime soap opera drama, MO1 or PM comes in with this thick file marked Confidential just to create suspense. he rest is predictable.

  14. The government is not bound by the ‘promises’ made in Najib’s Friday’s Budget Speech as there was no commitment made at all. All he gave were mere outlines, no pertinent details that the government can be held on to. Najib was only trying to play safe.

    Does the government have the money to fulfill the budget allocations in the first place?

    The opposition MPs left the hall because Najib insulted them. He, Najib, was making use of the opportunity to campaign for UMNO and BN which was very wrong.

  15. Soro’s most appropriate and timely warning to Obama to stay away from this highly and extremely corrupted MO1 Najib and the demand of the release of Anwar is the welcome news for all suffering people of Msia. The whole world now know how this abusive and criminal PM will bring the nation to bankruptcy and financial miseries and adopt the most cunning and repressive regimme to win election in order to pepetuate his evil legacy!

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