Monday, May 20

Time to be grateful

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File photo shows Minister of Finance Lim Guan Eng tabling the 2019 Budget in the Dewan Rakyat. — Bernama photo

WE Malaysians have a lot to thank for the survival of our country – a Federation of States – separated by a wide sea, for the past 55 years.

In a society whose members are mostly believers in God, it is to The Almighty that we give thanks for everything; to Him also we attribute blame when something has gone wrong with us.

An insurance company refused to pay claim for payment for a house damaged by a storm because this was caused by ‘an act of God’.

Not really fair to Him, but then, He tolerates freedom of expression.

He does not rush to the police to lodge a report against anybody for defaming Him.

That is the trouble with God – too kind, too forgiving. His attitude spoils people.

Enough of the layman’s idea of theology.

Giving credit where credit is due

What about giving thanks instead of blaming all the time – for the survival of Malaysia, for instance?

Honestly, we must thank the founding fathers of the Federation of Malaysia for adopting the parliamentary system of government for the country.

This is the system that allows for regular holding of elections to enable the citizens to choose the legislators and the administrators to manage the affairs of the country for a period of time for their benefit.

During that time, their rule is being judged. If they fail to perform to expectations, then the voters have the right not to vote them into office again, trying other politicians instead to run the country for them.

The process of governance moves like a wheel – until a dictator stops or interferes with its mechanism.

For the survival of Malaysia, we have a lot to thank Datuk Seri Najib Tun Razak and his advisors for not resorting to an emergency rule when his government was about to collapse in May this year. He could have resorted to some undemocratic measures in order to retain power at all costs, but he did the wise thing – admitting defeat and passing the baton to some other group of politicians without real problem, so that the ordinary Malaysians could get on with their daily chores free from serious political or social upheaval.

Incidentally, his late father Tun Razak, as Deputy Minister/Chairman of the National Security Council, was more or less in a similar situation during the Emergency. He could have made himself a dictator after the racial mayhem in Kuala Lumpur in May 1969, but he didn’t take that path; instead he made efforts to end the Emergency, and restore democracy to Malaysia he did.

Thank God for that too.

Nursing economy back to normal

We must also thank the voters of Malaysia when they chose their legislators in May this year. Among the elected lawmakers, some have formed the federal government for the next five years. Be at liberty, to vote them out of office if they are found wanting by the time next general election comes around. Meanwhile, give them the chance and time to prove themselves that they are capable of managing the economy of the country.

The proof of the pudding is in the eating.

On Friday, Nov 1, the Pakatan Harapan government’s maiden budget together with some proposal for fiscal legislation was presented for eventual approval by Parliament.

The Federal Budget was followed by the Sarawak Budget on Monday.

A lot of talks about money this month!

If you will forgive me, I will skip comment on both budgets for the time being. I’m studying them with help from a qualified charted accountant. Anyway, already there have been enough comments, both negative and positive, about both budgets.

In Sarawak, these comments are mainly partisan. Let’s view them against the backdrop of the current love/hate relationship between the federal and the state governments – thanks to freedom of expression.

Wait for in-depth and apolitical analyses of both budgets; the analysts will have to wade through the river of statistics.

Talking about statistics, it reminds me of a university professor who was lecturing in Economics (1961). His favourite joke was that ‘a government budget is full of statistics and statistics are like a bikini – what it reveals is important, but what it conceals is vital’.

Taking a leaf from aoteroa  

However, I can’t resist the temptation to comment on the federal government’s proposal to introduce next year a piece of legislation called the ‘Fiscal Responsibility Act’.

I say that this is a smart move on the part of our Ministry of Finance. The name of the proposed Malaysian legislation may be the same – the Fiscal Responsibility Act – as that of New Zealand’s finance law; but hey, what’s in a name?

New Zealanders, in the 1990s, made fun of their Finance Minister named Ruth Richardson. But it was ‘Ruthless’ Richardson who introduced the Fiscal Responsibility Act in 1994, which earned for New Zealand a name as a country called a ‘basket case’ from 1980s to 1990s to a country of quality public policy and of a robust and disciplined government today.

That Kiwi’s Fiscal Responsibility Act (amended and incorporated into the Public Finance Bill of Dec 4, 2012) ‘makes the Government and the Treasury responsible for reporting to Parliament specified information about fiscal strategy, the current economic and fiscal situation and the outlook over the medium and the long terms’.

Close and regular monitoring of public expenditure by Parliament is vitally important for the health of the economy of the country.

Doesn’t this remind you of a good medical doctor who will immediately test your blood pressure before he or she does other things with you?

The Fiscal Responsibility Act compels government to constantly monitor the health of the economy and to instantly inform Parliament of the true condition of the country without waiting for the annual report from the Auditor General.

The finance officials including their political masters will have to do their homework, always alert and ever ready to be grilled any time by the Opposition in Parliament, or the scrutiny of the press.

Is there any wonder that there is little corruption in high places in such a country?

While no two countries have exactly identical problems at all times and in all aspects, still the solutions to some fundamental economic problems of any democratic country require application of conventional economic principles – among these are smart allocation and management of scarce resources, not spending beyond one’s means, and avoid keeping up with the Joneses, etc.

Kleptocrats are quickly nabbed before they can dip deeper into the kitty.

Spending within one’s means

The wisdom of spending within one’s means is ancient. But it has been ignored by humans because of their inherent frailties – greed, among those.

While an individual’s habit cannot be legislated, habit of persons tasked with the responsibility for spending public-owned money may be regulated. A law like the Fiscal Responsibility Act will be good for the whole of Malaysia.

‘TI’ before ‘IT’

Every civil servant in Sarawak must have heard about ‘TI’ long before they heard about IT (information technology).

‘TI’ means ‘Treasury Instructions’. This document spells out a proper procedure of procuring goods and services, which are to be paid out of the taxpayers’ money. For instance, quotations must be called from at least four different suppliers for the purchase of stationery for a government’s department or agency.

Any project costing above certain amount – say above RM10,000 (1970 prices) – must be put out for public tender and advertised on the print media. The lowest tender or any tender need not be accepted.

‘Negotiated’ tender

The old civil servants in Sarawak will testify that there was no such thing as a negotiated tender during their time.

Fear of God

In the good old days, heads of departments or financial controllers in the ministries feared, not God, but the auditors, or an appearance before the Public Accounts Committee (PAC) of the Council Negri. It is the auditors and the PAC that would put the fear of God in any permanent secretary, head of department, or resident, down the line to the accounts clerk in a district office.

Ever wonder why there was practically no serious financial scandal involving civil servants in Sarawak those days?

Try out the ‘Ruthless’ Fiscal Responsibility Act in Malaysia and see what happens.

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