KUALA LUMPUR, Sept 1 — The Institute for Democracy and Economic Affairs (IDEAS) Malaysia said the release of Malaysia’s first ever Pre-Budget Statement (PBS) was a good move, saying that it has many elements of a Mid-Year Review (MYR) document, including updates on the ongoing budget implementation.
In a statement today, IDEAS said it should be noted that other countries such as South Africa normally combine their PBS and MYR mid-term review into one singular document.
It said should this be the direction Malaysia wishes to take, then it would be prudent to include this in the future Fiscal Responsibility Act (FRA).
“PBS is one of the eight key budget-related documents normally recommended by established international organisations such as the International Budget Partnership (IBP), to be made available to the public for transparency purposes.
“This type of document normally sets out the government’s budget strategies for one or two budget years and encourages meaningful discussion between ministries and stakeholders,” it said.
It said the PBS can also help set appropriate public expectations of the budget.
Chief executive officer Tricia Yeoh said IDEAS has long called for ways in which the Ministry of Finance (MoF) can improve its position in the international Open Budget Survey, which measures the budget transparency of each country.
“As pointed out in the PBS, Malaysia scores relatively low at 47 compared to regional neighbours Philippines (76), Indonesia (70) and Thailand (61).
“Making PBS publicly available onwards will certainly improve our scores. We have encouraged the government to take this up for many years, and we are therefore pleased to see this unprecedented step being finally implemented,” Yeoh said.
She said, hence IDEAS thanked MoF and the National Budget Office in particular, for their responsiveness to its call.
“IDEAS also welcomes the plan to release a consultation paper on the FRA, which will provide a clear strategic direction of Malaysia’s fiscal plans in the future,” she added.
IDEAS’ senior research manager in public finance Sri Murniati Yusuf said while the PBS is certainly a welcome development, it can still be improved upon by providing more information on Budget 2022 as well as projections of revenue, expenditure and debt levels for the next two to three years.
“Including this information would bring us up to the international standard of budget transparency. This will also show whether the government has a clear plan on fiscal consolidation.”
“We also welcome the plan to review public spending and it should be noted that most developed economies already have this mechanism in place and this will be an important tool in the government’s future efforts to expand its fiscal space,” she said. — Bernama