Egalitaria - Opening up budgets

16 Sep 2015 / 19:10 H.

    THE Auditor-General's Office has found massive discrepancies in government spending for the longest time. While it is excellent that the auditor-general boldly reveals this year after year, it is important that civil society equips itself with tools to analyse national documents too, without having to rely on an external body.
    IDEAS was the country researcher for the Open Budget Survey 2015, an international index that we launched last week. The survey covers 102 countries and assesses government budget transparency and accountability, including the space for public participation and the strength of supreme audit institutions (in our case, the Auditor-General's Office) and Parliament in overseeing the budget. Essentially, it tells you how transparent and accountable the budget is, and whether the process leading to the budget is equally robust.
    Understandably, to most people budgets are considered as very dry documents, full of figures and tables that make little sense. Each year when the Budget document is released, most people don't read it, and refer instead to the prime minister's speech as the "Budget".
    Of course, those of us involved in civil society, government and activism know otherwise. In other words, we are the policy geeks or wonks that spend the time analysing dry documents. This is because we know that the Budget document contains a wealth of information.
    We know that the Budget is one of the following: It is a roadmap because it tells you what the country is planning to do for the full year ahead; it is a set of accounts because it tells you how much the country has spent in the last year, and how much it intends to spend in the coming year; it is a risk assessment because it can be a red flag telling you how risky our financial situation is ("can be" because this is true only if budgets are transparent); and it is a manifesto: because it tells you the social and economic priorities of the elected government.
    Because the budget is a government's plan for how it is going to use the public's resources to meet the public's needs, transparency is of utmost importance as it means that citizens can access information on how much revenue is collected, how much is being spent and in what areas, and finally how these resources are used in the right locations. The more open budgets are, the more empowering, since people like you and me would now be the judge of whether or not our government is a good steward of our public funds.
    The 2015 survey results show that Malaysia scores 46 out of 100, meaning the government only provides us with limited budget information. This is a slight overall improvement from our earlier score of 39 in 2012, but is by no means reason to celebrate. Although we perform relatively well in oversight by the Auditor General's Office (67 out of 100), thanks to the current AG's scrupulous work, few realise his office is not independent of the executive and he cannot choose which agencies to audit.
    More worrying is the fact we perform poorly in parliamentary oversight (15 out of 100). Parliament should ideally have a specialised budget research office, and the process of debating the budget – and the supplementary budget, which in itself is bad practice – is extremely limited. Parliament is not consulted before the executive spends any unanticipated revenue, nor before it spends contingency funds that were not identified in the originally tabled budget.
    A robust budget cycle also includes an inclusive and comprehensive component of public participation, which Malaysia also performs poorly in (12 out of 100). This means the public has very limited opportunities to engage in the budget process. Although the National Budget Office under our Ministry of Finance organises focus groups and invites contributions, these are extremely general.
    More effective and impactful could be parliamentary hearings on specific ministries and departments' budgets to obtain feedback from the public. In fact, the public could also be invited to participate in the auditor-general's auditing process and investigations.
    Even if a small fraction of the public access budget data, having a transparent fiscal process would be able to strengthen oversight, improve policy choices and increase citizen participation to reduce the likelihood for governments to hide corrupt, wasteful and unpopular practices.
    In fact, what is most worrying is that the government spends an excessive amount of money that is not even included within any budget documents in the form of contingent liabilities and off-budget spending. Citizens ought to demand that all forms of government expenditure are recorded and put into the central budget for better monitoring.
    Today, fiscal transparency and increasingly, public participation are terms that are championed internationally by the World Bank, the OECD (Organisation for Economic Co-operation and Development), IMF (International Monetary Fund) and other global bodies. It is also by these standards that Malaysia and its competitiveness will be measured.
    But ultimately, even if we care little about the international community's opinions, more open, transparent and inclusive budgets would facilitate the process for better public service delivery to the citizens of Malaysia. Transparency is just a tool for us to get there.
    Tricia Yeoh is the chief operating officer of a local, independent think-tank. Comments:

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