Why select committees need to analyse Budget 2021

By Fakhrurrazi Rashid


The 2021 Budget has received serious backlash from economists, think tanks, industry players and MPs alike. According to Research for Social Advancement (Refsa), Budget 2021 can be improved by providing large allocations towards creating employment opportunities in important sectors such as in the green sector. This will create a more competitive economic activity that can generate growth and trigger purchasing power.

Jomo Kwame Sundaram stated that the 2021 Budget needs to emphasise the spending aspect to cover the risk of the Covid-19 crisis. He also raised concerns about the governance of government-linked companies (GLCs) and that they are given a significant allocation to operate the programmes in the 2021 Budget.

MPs also strongly voiced that the government needs to amend the 2021 Budget when there are some political provisions such as the establishment of the Department of Special Affairs (Jasa) which receives relatively large funds that should be distributed for the assistance of the frontliners, for instance.

The concerns and shortcomings of the 2021 Budget analysis should be managed by the government by examining the remarks in an effort to improve the budget for the benefit of all parties. So, what is a more effective way to review and review the 2021 Budget with a pragmatic and open approach?

An effective way to solve this problem is to assign the task to a parliamentary select committee to scrutinise and review the 2021 Budget. This has been practised by some parliamentary institutions in the United Kingdom, Canada and Australia.

Traditionally, this process is rare in Malaysia as the federal government often conducts pre-budget engagement sessions only. This process is detrimental because the government may not take this process seriously and does not consider the criticisms of the national budget after it is tabled in Parliament.

It may cause the budget to be one-sided and only take into account the interests of the government without an open review process. This is what happens today when the federal government does not consider proposals for improvement of the budget but chooses the political path to urge Parliament to approve Budget 2021. Therefore, this old practise should be changed so that stakeholders have the right to propose amendments after the budget is tabled in Parliament.

There are several important functions of the select committee in studying the national budget. First, it provides an opportunity for government and opposition MPs to investigate and review every detail of the budget so that it truly meets the needs of the economy and the people without the intervention of the cabinet. Second, this committee has a role to receive suggestions, views and feedback from stakeholders, organisations and industry players to improve government budgets.

Third, the committee is responsible for issuing a full report on the budget and submitting it to MPs for debate. Prior to that, the minister of finance needs to provide feedback and take the proposals from the report. If the finance minister rejects the proposals or fails to provide feedback, then Parliament has the right to debate the report so that the government can clarify their position.

As for now, Parliament has a Finance and Economy Select Committee which is one of the new committees announced by the Dewan Rakyat speaker. It is appropriate if this committee is given the task immediately to make a comprehensive review of the Budget 2021.

This process can take place if all members of Parliament agree that the 2021 Budget will be referred to the Finance and Economic Select Committee before the 2021 Budget debate at the committee level. Parliament needs to appoint members of the Finance and Economy Select Committee urgently so that it can act immediately in analysing the Budget 2021.

This select committee system is the closest approach to examining the national budget to take into account views from citizens and industry players. Furthermore, this committee system may provide a method of analysis and perspective of the impact of the budget comprehensively and not just the views of the government or the minister of finance only.

However, this will only happen if the government has a political will to really solve the weaknesses found in the 2021 Budget in an orderly and democratic manner.

This is also an opportunity to create a transparent and democratic process towards creating a healthy national budget. This could at least create awareness of the complexities of the budget, transcending political differences and beliefs.

In the current situation, the government should not force MPs and the people to accept a budget that has various weaknesses. The 2021 budget is not a platform for the government to wage a “political war” against those who criticise the government’s shortcomings.

If the 2021 budget is approved without overcoming its existing weaknesses, then it will add to the burden of the people and the country in the future. Therefore, the government needs to be brave and mature in making use of a select committee to review our national budget. Through this difficult time, the function of a select committee reviewing the 2021 budget is a positive step towards improving the Malaysian economy in times of a crisis.


– Published in Malaysiakini on 17 November 2020.

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