IDEAS said the modest progress, however, was overshadowed by a sharp decline in public participation, with the score falling from 28 out of 100 to 20, alongside continued weaknesses in parliamentary oversight, where the score dropped from 43 to 41 out of 100.
“Despite the improvement in transparency, Malaysia continues to lag behind regional peers such as Thailand (53), Indonesia (71) and the Philippines (76),” the think tank said in a statement today.
IDEAS has contributed to Malaysia’s assessment in the OBS, which compares budget transparency data from 82 countries, for more than a decade.
The OBS assesses public access to federal government budget information, formal opportunities for the public to participate in the budgeting process, and the role of budget oversight institutions, such as Parliament and national audit offices.
IDEAS said that more critically, Malaysia remains below the minimum benchmark score of 61 for transparency, the threshold indicating that sufficient budget information is available for meaningful public understanding and scrutiny.
It said a key factor behind the decline in transparency was the discontinuation of public consultation papers (PCPs), which were introduced during Budget 2023 to gather public feedback on major policy issues, including targeted subsidies, sustainable development, and green procurement.
“PCPs were a welcome development and should be institutionalised throughout the budget cycle,” IDEAS said.
It said engagement efforts should also prioritise underrepresented and marginalised communities, including persons with disabilities and Orang Asli communities.
On Malaysia’s oversight score declining to 41, IDEAS said this highlights continued weaknesses in legislative scrutiny over the budget process.
“While audit oversight remains relatively strong, parliamentary oversight during the planning and implementation stages remains inadequate,” it said.
It recommended strengthening accountability by giving parliamentary committees greater authority to scrutinise budget proposals and requiring them to publish their findings before budgets are approved.
“This would improve legislative oversight at a critical stage of the budget process and strengthen transparency in fiscal decision-making,” it said.
OBS recommendations
The OBS report for Malaysia acknowledged that the finance ministry has set up online platforms and digital consultations during budget formulation and implementation.
To strengthen public participation further, it suggested the ministry prioritise actively engaging with underrepresented communities either directly or through civil society organisations (CSOs).
The report also said the Dewan Rakyat should allow members of the public or CSOs to testify during its hearings on the budget proposal prior to its approval as well as during hearings on the audit report.
Recommendations to improve oversight include introducing a process where the legislature could debate budget policy before the budget document is tabled in Parliament.
“Legislative committees should also examine the proposed budget and publish reports with their analysis online,” it said.
To strengthen independence and improve audit oversight, the report recommends legislative or judicial approval for the appointment of the head of the national audit department and to ensure audit processes are reviewed by an independent agency.