Budget 2025 plays a pivotal role in bolstering Malaysia’s regulatory landscape that underpins good governance practices. — MOHD SAHAR MISNI/The Star
Malaysia’s Budget 2025, unveiled amidst evolving global economic conditions and domestic challenges, presents an opportunity to examine how well it advances the principles of transparency, accountability, and ethical governance.
The link between a nation’s budget and its governance framework is profound, and in many ways, Budget 2025 attempts to solidify Malaysia’s position as a nation committed to responsible governance.
Through its allocations and policy directions, the budget not only addresses fiscal concerns but also embeds mechanisms that could improve public trust in government institutions.
Transparency, accountability in public spending
One of the fundamental tenets of good governance is transparency, particularly in public spending. In this regard, Budget 2025 demonstrates a strong commitment to ensuring transparency in how resources are allocated and utilised.
The introduction of enhanced public reporting mechanisms are evidenced through the publishing of pre-budget statements and detailed budget documents, implementing platforms like the Open Data Portal (which includes certain financial information), the Government Procurement Portal (to track procurement activities) and the Auditor General’s Reports (which assess financial accountability within government departments) – reflecting a clear shift towards greater openness.
These measures enable civil society and other stakeholders to scrutinise spending more effectively, reducing opportunities for mismanagement.
Siew opines that Budget 2025 attempts to solidify Malaysia’s position as a nation committed to responsible governance.
The impact of these transparency initiatives on governance is significant. By making public expenditure more visible and accessible, Malaysia’s governance framework is enhanced through greater accountability.
When public officials are aware that their financial decisions are subject to rigorous scrutiny, the potential for inefficiency or malfeasance typically diminishes.
Moreover, the promotion of transparency through Budget 2025 aligns with international best practices, encouraging foreign investors and multilateral institutions to view Malaysia as a country committed to responsible fiscal management.
Supporting good governance via strategic measures
Budget 2025 also plays a pivotal role in bolstering the regulatory landscape that underpins good governance practices.
Firstly, it emphasises enhancing transparency and efficiency in public service delivery by digitising government operations, which helps reduce inefficiencies and resource wastage.
The budget also addresses monopolistic practices by tightening regulations in procurement and other sectors, which promotes fair competition and reduces opportunities for corruption. Malaysia’s commitment to governance reforms is reflected in this budget cycle where the Malaysian Competition Commission will receive RM27mil to combat cartels aiming to monopolise the economy while ensuring equitable economic gains and fostering accountability.
What was also interesting is the announcement of the incoming carbon tax starting with the iron, steel and energy industry sectors come 2026 to promote greater accountability on how we are managing carbon emissions.
This is perhaps the signal that advocates of a vibrant low carbon economy have been waiting for as we strive towards becoming a carbon neutral nation by 2050 and also in light of developments related to the European Union’s Carbon Border Adjustment Mechanism, which may directly impact these industries.
Allocation of funds for ethical governance
The distribution of funds in Budget 2025 also underscores the government’s focus on ethical governance. The Malaysian Anti-Corruption Commission (MACC) will receive RM360mil in allocation in this budget cycle compared to RM338mil previously.
An additional RM20mil has been allocated for the bipartisan All-Party Parliamentary Group Malaysia Sustainable Development Goals as well as funds to empower the Public Accounts Committee (PAC) to check and balance the government. It is anticipated that there will still be continuity in allocation to capacity-building programmes designed to enhance the skills of public officials, particularly in areas like risk management, procurement, and financial oversight that aligns with broader fiscal reforms under the Fiscal Responsibility Act, which emphasises sustainable debt management and deficit reduction while ensuring effective governance.
Building public trust through Budget 2025
Ultimately, Budget 2025’s influence on public trust in Malaysia’s institutions cannot be understated. The commitment to transparency, ethical governance, and anti-corruption measures directly contributes to restoring faith in the government.
By focusing on governance reforms and accountability measures, Budget 2025 offers a pathway to rebuild that trust.
Public trust is integral to the overall governance framework. When citizens believe that their government is acting in their best interest, handling public funds responsibly and enforcing ethical practices, there is a stronger foundation for social cohesion and democratic participation.
In this sense, the measures outlined in Budget 2025 marks a critical juncture in the country’s efforts to enhance governance through transparency, accountability and ethical oversight.
The budget’s focus on regulatory enforcement and ethical governance provides a solid foundation for building public trust and ensuring that Malaysia’s institutions operate with integrity.
As these initiatives unfold, they will play a pivotal role in shaping the future of governance in the country, influencing not only fiscal policy but also the broader socio-political landscape.
Dr Renard Siew is Yinson Holdings Bhd’s corporate sustainability group head and the Malaysia Carbon Market Association president.
