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Friday, November 18, 2016

YB William Leong: Two Reasons for Rejecting Budget


"This article seeks to respond to a few statements circulating in the social media that the opposition voted against the 2017 Budget to prevent the people, especially the poor, from enjoying the benefits bestowed to them by the Finance Minister. There are many reasons the opposition voted against the Budget. I wish to highlight only two. The Finance Minister lacks the legitimacy to be entrusted with the continued management of the people’s money and the 2017 Budget reveals his misplaced priorities.  
Lack of Legitimacy

The core of public finances is that some people spend other people’s money. In democracies, voters delegate the power over public spending and taxes to elected politicians.[1] The delegation of power to elected politicians implies that except for those of the highest integrity there are risks the politicians will extract rents from being in office and spend public money on projects other than those voters desire. 

One of the tools for ensuring the people’s money is spent in accordance with the people’s desire is the budget. The budget is a contract between the voters and the Government showing how resources are raised and allocated for delivery of public services. The budget is the primary instrument for implementing fiscal policy thereby influencing the economy as a whole and how the Government plans to turn aspirations into reality.[2] The budget is the reflection of the policy and priorities of those who control and manage government machinery and apparatus at the given time. As a consequence budget transparency and accountability are very important means to truly democratize government and processes of governance. 

Accountability denotes the rights, responsibilities and duties that exist between the people and the government institutions. Accountability and legitimacy are two sides of the same coin. Lack of accountability will result in lack of political legitimacy. Lack of legitimacy will result in democratic deficit and the consequent abuse of power by decisions makers and power-holders.[3]

When Dato Seri Najib Tun Razak refused to resign as Finance Minister following the 1MDB revelations, he plunged his Government into a legitimacy crisis."

Individual Ministerial Responsibility

"The Finance Minister’s loss of legitimacy and credibility is due to his failure to abide by the constitutional convention known as individual ministerial responsibility. A fundamental constitutional convention under the Westminster parliamentary system is that ministers are responsible for the conduct of their ministry. 

The principle of individual ministerial responsibility is central to the parliamentary system because it ensures the accountability of the government to Parliament and thus, ultimately to the citizens as a whole. The accountable minister in charge is expected to take the blame and ultimately resign. This means that if waste, corruption or any other misbehaviour is found to have occurred within a ministry, the minister is responsible even if he had no knowledge of the actions. The principle is essential to guarantee that an elected official is answerable for every single government action. ..." 

Failure to be accountable to Parliament  

"The Finance Minister failed to honour a second aspect of the Westminster principle of individual ministerial responsibility. This is the principle that a minister is accountable to Parliament. Ministers are the link between Parliament and Government. Public servants carry out the activities of Government through their work in department and agencies and the Government directs them through ministers responsible for their activities which include activities by government-owned companies such as 1MDB. The minister is responsible to Parliament for decisions made and actions performed by those under his delegation. This means the minister must make announcements and answer questions in Parliament on the decisions and performance of their departments. ..."

Death of Democratic Governance and Accountability

It is no longer possible for the BN MPs to turn a blind to the wrongdoing in 1MDB. Any denial of wrongdoing is totally not credible in the light of recent revelations by the international media on the US DOJ suit, actions by the Swiss and Singapore authorities to withdraw the licences and to file criminal charges against the banks and officers engaged in the money-laundering of the proceeds from 1MDB. The first conviction and sentence of imprisonment was delivered last week. 
Continued survival has been bought by co-optation, propaganda, censorship, repression, prosecution and imprisonment of opposition leaders, activists, lecturers and students. The costs for maintaining power includes sackings, transfers, acts of humiliation and calls to ostracise dissenters and those troubled by their conscience in the UMNO leadership, past and present, the rank and file and Government agencies and institutions.

The 117 BN MPs in voting for the 2017 Budget and 11 PAS abstentions in the face of such legitimacy crisis hammered the final nail into democracy’s coffin in Malaysia. The government transformation programme from democracy to authoritarian regime is now completed. When the 2017 Budget was approved democratic governance, transparency, integrity and accountability in Malaysia died and were buried.

Off-Budget Debt

"The lack of legitimacy continues as the Government enters into one after another mega contract, privatisation and concession. One of the biggest concern in the 2017 Budget is not what is in the Budget but what is not there. It is off-budget funding. Off-budget funding kept outside of government financial regulations, reporting and audit requirements can give rise to illegal and irregular transactions. In addition the use of such funds means the reported level of government expenditure and debt may be understated. 

Off-budget funding may not be contrary to the letter of the law but it violates the spirit of the law. Omitting off-budget funding in the Budget documents offends the principle of providing the public a comprehensive, accurate and reliable account of the public finances. The Budget is a contract of trust between the Government and the citizens. It is expected that the Budget document should account comprehensively and correctly for all expenditures and revenues of the Government and that no figures should be omitted or hidden. ..."

Misplaced Priorities 

"Why does the Opposition bother to debate the Budget? BN with its majority will push through and rubberstamp the 2017 Budget no matter what we say. We soldier on to discharge our constitutionally-mandated duty. Although in the minority, we like the BN MPs, are the guardians of public money. The Government cannot spend a single cent from the Consolidated Fund without Parliament’s approval. By making a stand, it is a reminder that the national coffers are not someone’s personal account. The Government is accountable for wastage, corruption and embezzlement. The Government is required to put on record its justification or the absence thereof in spending the people’s hard earned money and the nation’s scarce resources. In doing so, we put public concerns to bear on the Government’s fiscal and economic policies. It is hoped that by a detailed, focused and considered debate it would improve public understanding of both the process and thinking behind the fiscal measures, their impact on the economy and lives of the people."

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