In a first for Malaysia, Finance Ministry releases pre-Budget statement to show govt spending plan for next year

·4-min read
Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz said the publishing today of the PBS for the Malaysian government’s Budget 2022 is part of efforts to improve the annual budget preparation process. — Bernama pic
Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz said the publishing today of the PBS for the Malaysian government’s Budget 2022 is part of efforts to improve the annual budget preparation process. — Bernama pic

KUALA LUMPUR, Aug 31 ― The Finance Ministry released today its first-ever Pre-Budget Statement (PBS) ahead of the government’s parliamentary proposal on the country’s expenditure for next year in a bid to be more transparent.

Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz said the publishing today of the PBS for the Malaysian government’s Budget 2022 is part of efforts to improve the annual budget preparation process.

“This PBS is the first in the nation’s history,” he said in a statement.

Tengku Zafrul said the PBS could also help boost investors’ confidence in how the country manages its finances.

In the 19-page PBS for Budget 2022, the Finance Ministry said transparency and extensive involvement by Malaysians in the preparation of the annual budget is one of the basic principles of good governance, which enhances public confidence especially among investors.

The ministry also said the inaugural PBS is in line with the proposed Fiscal Responsibility Act aimed at improving the “governance, transparency and accountability” of the country’s fiscal management.

“Therefore, the public is able to have a preliminary view of the direction, approach taken and expected initiatives that will potentially be in Budget 2022,” the ministry said in the PBS.

The ministry noted that the PBS will also improve Malaysia’s position in the Open Budget Index (OBI), with this global index by the International Budget Partnership (IBP) determined through a survey that measures transparency in the annual budget preparation process.

“Based on the IBP report for 2019, Malaysia recorded a relatively low score of 47 for budget transparency compared to regional countries, such as the Philippines (76), Indonesia (70) and Thailand (61),” the ministry said.

Commenting on the PBS’ preliminary overview of Budget 2022’s direction, Tengku Zafrul said next year’s government budget will be crafted based on three objectives or themes.

These three themes would revolve around the national recovery from the Covid-19 crisis, rebuilding of national resilience and catalysing reforms, he said.

“Protecting and driving recovery of lives and livelihood: Budget 2022 will drive the national recovery process to ensure that the nation successfully exits from the Covid-19 crisis, as well as continue the post-crisis recovery agenda to help lives, livelihoods and badly-affected economic sectors.

“Efforts to help vulnerable groups and generate new job opportunities will continue to be prioritised,” he said of the first theme.

Additionally, the PBS highlighted tourism and retail as among the badly-affected economic sectors that the government would help to recover, while also stating that Budget 2022 would make protecting and generating new jobs a continued priority.

“Budget 2022 will also focus on efforts to help the vulnerable and disadvantaged segments of society, women, indigenous people and the disabled to ensure no one is left behind in the nation's developmental and recovery agenda,” the PBS said under the first theme.

As for the second theme of rebuilding national resilience, Tengku Zafrul said Budget 2022 will emphasise on “rebuilding the resilience and capacity of the nation's public health system, enhancing digital and technological infrastructure, especially within the education sector, and facilitating the nation’s transition to high productivity industrial sectors based on automated technology and high skills”.

Additionally, the PBS when touching on the second theme said Budget 2022 will also evaluate means to rebuild fiscal resilience, which was affected by the high level of government commitments required to finance the economic stimulus packages and government aid to the people and businesses.

On the third theme, Tengku Zafrul said Budget 2022 will ensure that reforms are implemented while focusing on achieving the Sustainable Development Goals, the 12th Malaysia Plan and the Shared Prosperity Vision 2030.

“MoF is confident that the publication of the PBS will provide more avenues for stakeholders to provide feedback and contribute towards formulating a budget that is well-aligned to the needs of the Rakyat, as well as the country’s policies and national objectives,” he said.

The 12th Malaysia Plan is expected to be tabled in the Dewan Rakyat on September 27, while Budget 2022 is expected to be tabled in the Dewan Rakyat on October 29.

Among other things, the PBS said the third theme of Budget 2022 would involve government efforts to improve the efficiency of the public delivery system and to emphasise Environment, Social and Governance (ESG) elements in public service, statutory bodies and government-linked companies.

“These efforts reflect the country’s determination to develop a more sustainable and inclusive economy, which will be an attraction for investors looking to make the country a major investment destination,” the ministry said.

In the PBS, the Finance Ministry also highlighted the importance of civil society organisations as the government’s development partner in addressing various issues on the ground, saying that the government will be strengthening such partnership in matters such as poverty eradication, livelihood and improving the quality of the people’s health.

The full PBS can be found here on the Finance Ministry’s website.

Related Articles Finance Ministry: RON95, RON97 and diesel prices remain unchanged CGS-CIMB: Budget 2022 to combine pro-growth, inclusive agenda Finance Ministry: Malaysian govt looking at ways to increase tax collection, including voluntary disclosure of unpaid indirect tax

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting