Malaysiakini Letter

We must rethink frequent supplementary budgets

TK Chua  |  Published:  |  Modified:

LETTER | It is true this is not the first time the federal government has tabled a supplementary supply bill in the Dewan Rakyat. However, this does not mean we are doing it right. Incurring extra expenditures and then subsequently seeking supplementary approval has become habitual.

A cardinal principle in our system of government is strict financial control of expenditure and taxation. Taxes can only be raised with expressed laws and expenditures can only be incurred with expressed approval of the Dewan Rakyat through the Supply Bills.

If we care to read our annual budget carefully, there are already contingency funds set up to cater to unforeseen situations or circumstances. Why then are we having supplementary budgets year in and year out?

We can infer frequent supplementary budgets in many ways.

First, the government is not “serious” in its budget proposals. Its programmes are not comprehensive and definite enough and that is why there is a need for constant adjustments and additional funding in the course of the year.

Second, the government is “under budgeting” during its annual budget presentation to give the impression the fiscal deficit is under control or consolidating. In reality, government “locked-in” or committed expenditures could be much bigger than the budgeted amount.

Third, frequent supplementary budgets are also signs of ministers and the prime minister exercising power circumventing the roles of the civil service in evaluating and assessing the expenditure programmes of the government. Increasingly, we find the executive branch of the government announcing programmes and projects that cost millions of ringgit out of nowhere. This could be the reason why so many of the programmes and projects have become topsy-turvy.

Rightly, there shouldn’t be new programmes or projects added to existing budget in the course of the year. To do so would suggest lack of discipline in financial management – either we spend without proper planning or we choose to violate our own deficit target.

To me, supplementary budgets are only justified when there is a national emergency or a natural disaster. Even for this, there is already a contingency fund earmarked in the budget. We should only invoke supplementary budgets when the contingency fund is insufficient.

For 2017, the planned deficit was RM40.3 billion. The supplementary budget that was approved recently was RM7.122 billion. We do not know there will be second or third supplementary budgets in the pipeline for 2017. But judging from the first supplementary budget alone, the additional deficit incurred was almost 18 percent more than the planned deficit.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

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