Contents
Transparency:
47
/100
(Open Budget Index score)
Public Participation:
17
/100
Budget Oversight:
31
/100

Government budget decisions – what taxes to levy, what services to provide, and how much debt to take on – affect how equal a society is and the well-being of its people, including whether the most disadvantaged will have real opportunities for a better life. It is critical that governments inform and engage the public on these vital decisions that impact their lives.

The Open Budget Survey (OBS) is the world’s only independent, comparative and fact-based research instrument that uses internationally accepted criteria to assess public access to central government budget information; formal opportunities for the public to participate in the national budget process; and the role of budget oversight institutions such as the legislature and auditor in the budget process.

The survey helps local civil society assess and confer with their government on the reporting and use of public funds. This 7th edition of the OBS covers 117 countries.

Transparency

This part of the OBS measures public access to information on how the central government raises and spends public resources. It assesses the online availability, timeliness, and comprehensiveness of eight key budget documents using 109 equally weighted indicators and scores each country on a scale of 0 to 100. A transparency score of 61 or above indicates a country is likely publishing enough material to support informed public debate on the budget.

Malaysia has a transparency score of 47 (out of 100).

Transparency in Malaysia compared to others

Global Average
45
Philippines
76
Indonesia
70
Thailand
61
Malaysia
47
Timor-Leste
40
Vietnam
38
Cambodia
32
Myanmar
28
0
Insufficient
61
Sufficient
100

Malaysia’s ranking: 55 of 117 countries

0
100

How has the transparency score for Malaysia changed over time?

39
2010
39
2012
46
2015
46
2017
47
2019
0
Insufficient
61
Sufficient
100

Public availability of budget documents in Malaysia

Available to the Public
Published Late, or Not Published Online, or Produced for Internal Use Only
Not Produced
Scroll
Document 2010 2012 2015 2017 2019
Pre-Budget Statement
Executive’s Budget Proposal
Enacted Budget
Citizens Budget
In-Year Reports
Mid-Year Review
Year-End Report
Audit Report

How comprehensive is the content of the key budget documents that Malaysia makes available to the public?

61-100 / 100
41-60 / 100
1-40 / 100
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Key budget document Document purpose and contents Fiscal year assessed Document content score
Pre-Budget Statement Discloses the broad parameters of fiscal policies in advance of the Executive's Budget Proposal; outlines the government's economic forecast, anticipated revenue, expenditures, and debt. 2019 Internal Use
Executive’s Budget Proposal Submitted by the executive to the legislature for approval; details the sources of revenue, the allocations to ministries, proposed policy changes, and other information important for understanding the country's fiscal situation. 2019 55
Enacted Budget The budget that has been approved by the legislature. 2019 22
Citizens Budget A simpler and less technical version of the government's Executive’s Budget Proposal or the Enacted Budget, designed to convey key information to the public. 2018 58
In-Year Reports Include information on actual revenues collected, actual expenditures made, and debt incurred at different intervals; issued quarterly or monthly. 2018 44
Mid-Year Review A comprehensive update on the implementation of the budget as of the middle of the fiscal year; includes a review of economic assumptions and an updated forecast of budget outcomes. 2018 Internal Use
Year-End Report Describes the situation of the government's accounts at the end of the fiscal year and, ideally, an evaluation of the progress made toward achieving the budget's policy goals. 2017 60
Audit Report Issued by the supreme audit institution, this document examines the soundness and completeness of the government's year-end accounts. 2017 86

Malaysia’s transparency score of 47 in the OBS 2019 is near its score in 2017.

Recommendations

Malaysia should prioritize the following actions to improve budget transparency:

Publish a Pre-Budget Statement and Mid-Year Review online in a timely manner.
Add more information about extra-budgetary funds, the government’s balance sheet, contingent liabilities and the long-term sustainability of government finances in the Executive's Budget Proposal.
Include in the Year-End Report performance and macroeconomic information.
Improve the In-Year Reports by providing comprehensive information on actual expenditures and revenues.

Public Participation

Transparency alone is insufficient for improving governance. Inclusive public participation is crucial for realizing the positive outcomes associated with greater budget transparency.

The OBS also assesses the formal opportunities offered to the public for meaningful participation in the different stages of the budget process. It examines the practices of the central government’s executive, the legislature, and the supreme audit institution (SAI) using 18 equally weighted indicators, aligned with the Global Initiative for Fiscal Transparency’s Principles of Public Participation in Fiscal Policies , and scores each country on a scale from 0 to 100.

Malaysia has a public participation score of 17 (out of 100).

Public participation in Malaysia compared to others

Global Average
14
Philippines
31
Indonesia
20
Malaysia
17
Thailand
13
Vietnam
11
Cambodia
6
Timor-Leste
6
Myanmar
0
0
Insufficient
61
Sufficient
100

For more information, see here for innovative public participation practices around the world.

Extent of opportunities for public participation in the budget process

27
/100
Formulation
(executive)
0
/100
Approval
(legislature)
25
/100
Implementation
(executive)
0
/100
Audit
(supreme audit institution)

few: 0 - 40; limited: 41 - 60; adequate: 61 - 100

Recommendations

Malaysia's Ministry of Finance has established pre-budget submissions during budget formulation and e-consultations during budget implementation but, to further strengthen public participation in the budget process, should also prioritize the following actions:

Actively engage with vulnerable and underrepresented communities, directly or through civil society organizations representing them.

Malaysia's Parliament should prioritize the following actions:

Allow members of the public or civil society organizations to testify during its hearings on the budget proposal prior to its approval.
Allow members of the public or civil society organizations to testify during its hearings on the Audit Report.

Malaysia's National Audit Department should prioritize the following actions to improve public participation in the budget process:

Establish formal mechanisms for the public to assist in developing its audit program and to contribute to relevant audit investigations.

Budget Oversight

The OBS also examines the role that legislatures and supreme audit institutions (SAIs) play in the budget process and the extent to which they provide oversight; each country is scored on a scale from 0 to 100 based on 18 equally weighted indicators. In addition, the survey collects supplementary information on independent fiscal institutions (see Box).

The legislature and supreme audit institution in Malaysia, together, provide weak oversight during the budget process, with a composite oversight score of 31 (out of 100). Taken individually, the extent of each institution’s oversight is shown below:

Legislative oversight

0
19
100
weak

Audit oversight

0
56
100
limited

weak: 0 - 40; limited: 41 - 60; adequate: 61 - 100

Recommendations

Malaysia's Parliament provides weak oversight during the planning stage of the budget cycle and weak oversight during the implementation stage. To improve oversight, the following actions should be prioritized:

The Executive’s Budget Proposal should be submitted to legislators at least two months before the start of the budget year.
Malaysia’s Special Select Committee on Budget, which has met since January 2019 to discuss the country's economic and financial positions, should review the budget proposal and in-year budget implementation and publish reports with their findings online.
In practice, ensure the legislature is consulted before the executive shifts funds specified in the Enacted Budget between administrative units; spends any unanticipated revenue; or reduces spending due to revenue shortfalls during the budget year.

To strengthen independence and improve audit oversight by the Malaysia National Audit Department, the following actions are recommended:

Require legislative or judicial approval to appoint the head of the supreme audit institution.
Ensure audit processes are reviewed by an independent agency.

The emerging practice of establishing independent fiscal institutions

Malaysia does not have an independent fiscal institution (IFI). IFIs are increasingly recognized as valuable independent and nonpartisan information providers to the Executive and/or Parliament during the budget process.

*These indicators are *not* scored in the Open Budget Survey.

Methodology

  • Only documents published and events, activities, or developments that took place through 31 December 2018 were assessed in the OBS 2019.
     
  • The survey is based on a questionnaire completed in each country by an independent budget expert:
    Sri Murniati
    Institute for Democracy and Economic Affairs (IDEAS)
    Taman Tunku, Bukit Tunku, Kuala Lumpur Malaysia 40580
    [email protected]
  • To further strengthen the research, each country’s draft questionnaire is also reviewed by an anonymous independent expert, and in Malaysia by a representative of the Ministry of Finance.

 

Other years