Ahmad, who tabled the bill for its first reading yesterday, said the second reading is set for tomorrow.

He said the first target is an annual development expenditure of at least 3% of the gross domestic product (GDP), adding that the yearly average since 2015 has been 4%.

“The second target is a fiscal balance of 3% of GDP or less in the next three to five years. This refers to the (fiscal) deficit,” he told reporters at the Parliament building.

He said the average fiscal balance for the past nine years has been 4.42% of GDP. The current fiscal deficit stands at 5% of GDP, and the lowest recorded was 2.9% in 2017.

The third target is a debt level as a percentage of GDP of 60% or less in the next three to five years. The figure currently stands at 56.3%.

Lastly, that government guarantees or contingent liabilities must be 25% of GDP or less. The average for the past eight years, according to him, has been 17.8%.

Ahmad said that if the target figures needed to be adjusted, then the bill provides that the finance ministry must table a motion and obtain the Dewan Rakyat’s approval.

He said the proposed law also provides for the ministry to give recommendations to the Dewan Rakyat in the event the targets are not met.

“This is like a key performance indicator (KPI) imposed on the ministry to ensure the four fiscal targets are achieved,” he said.

The FRA also provides for new reporting requirements, such as the need for a mid-term report on the federal budget to be tabled in Parliament.

However, he said, the FRA does not apply to state governments, but only the federal government as well as statutory bodies.

During the tabling of the revised 2023 budget on Feb 24, Prime Minister Anwar Ibrahim reaffirmed that the government will be presenting the FRA this year to ensure greater transparency and accountable management of the economy.