Budget 2015, 10th Malaysian Plan and 11th Malaysian Plan

1.      This year Budget is the last installment of 10^th Malaysian Plan. The 10^th Malaysian Plan (10MP)  is a testament of the ambitious Government Transformation Programme (GTP) and the New Economic Model (NEM), which premised on high income, inclusive and sustainability.

2.      As the first ever of Development plan for our Prime Minister, YAB Datuk Seri Najib Razak, the 10MP sets the stage for a major structural transformation that a high-income economy requires. The Plan contains new policy directions, strategies and programmes that enable the country to emerge as a high income nation.

3.      After 4 years of implementation, it is logical for us to gauge the success of this Plan thus far before ever we embark of a discussion for the Budget 2015. According to an article by The Edge Malaysia, the Plan targeted an annual growth of GDP for 6.00%, yet the forecast for our GDP for the first half of 2014 shows lesser value with 4.50% growth. With the introduction of GST next year, achieving 6.00% growth GDP is proved challenging for the policy makers and economic players.

4.      One of the 10 big ideas of 10^MP is unleashing productivity-led growth and innovation, however records shows that our national productivity remained flat and we are still struggling with talent issues like brain drain and high dependency on foreign workers. Talent Corporation an agency created to “manage” the talent issue in the country and is still working hard to achieve their target.

5.      Another big question is the position of our National Debt. Record shows that our Total Debt-to-Equity stands at 54.71% which just shy of 0.29% from the limit set by the Loan (Local) Act 1959. The Plan sets clearly that sustainability as key element and reducing the deficit is essential to pare down our National Debt. Again with only 1 year to go, it is like mountain to hike even the fiscal consolidation is undergoing.

6.      There are other issues within the 10MP, however, suffice to say is our Government really committed to follow through the plan that has been set up by itself. We can’t discount the possibility of external factors such as world economy dynamics, and all parties must alert and work together to prevent such thing to happen again, as we are the last stage of vision 2020. The 2015 Budget will become the bridge for us to leap to 11^th Malaysian Plan, the last ride of development plan before we put our self on par with the rest developed economy worldwide.

credit to The Edge Malaysia.

Financial Literacy, Enlightenment and Wisdom

1.      I hope fans of my writing should notice by now that though I read a lot, any genre that catch my eyes and heart, finance is always the top of the list. How a person who has been groomed to be an engineer since the secondary school could change 180 degree to finance?

2.      It is all started in my great years as student leader in UNITEN. I was given the responsibility to steer Persatuan Pembimbing Rakan Sebaya (PRS) UNITEN for a year by the members. At that time, I was shocked and surprised by the election result. Then, I happened to know that my friends from the previous year administration really lobby for me for the top seat.

3.      Well, the journey started. However, I started to have different opinion on how the society should operate. At that time, I realized I have to become better and knowledgeable. I started to read a lot, seek counsel from professional and UNITEN’s management lecturers on how I can improve the operational aspect of PRS UNITEN.

4.      Slowly I instilled Corporate Governance element in the society. I admit, it was not an easy task. Getting the buy-in from my senior management team and also the former leadership of the organization. They had some reservation and concerns that this modernization might change the society into different entity entirely.

5.      Alhamdulillah, although some of my senior management team opposed the idea, but the ordinary members received it very well and they liked it. Using their power as members, they managed to persuade those who oppose the plan and slowly I have to persuade them to buy-in to the concept.

6.      That year, I found out that, the strongest argument one can made to support his idea or opinion is numbers i.e money, projection, cost, revenue and so on. The buy-in process was a success because we started to use these numbers as basis for our programs and demands to the Management of UNITEN. Therefore, I concluded at that time, these financial number/metrics really powerful. It will help somehow, leaders to be focused and being objective

7.      Another reason my re-direction is I don’t like myself to be not knowing on something. When I read newspapers, magazine related to leadership, business and even the public sector, these financial metrics and numbers keep popping up. Look at the back of business section of any newspaper, tables and numbers of closing share prices for investor’s references. I felt uneasy and unrest. I don’t like myself in the state of ignorance. I know these number are important. Therefore I must do something.

8.      So, I enrolled into MBA program after I spent a year and half as Officer in Arkib Negara Malaysia. I decided to do it part-time, whereby I attend evening classes after working hours for 20 months. I love everything about UNIRAZAK and MBA, particularly Corporate Finance. Finally, I found my niche, my talent, my passion and my forte. I know this course will bring me to greatness, In Shaa Allah.

9.      Now, I have my sight for Public Finance. I believe Public Finance knowledge is essential for all Malaysian, especially the Youth. Alhamdulillah, my professor and my mentor at Treasury always provide me with notes, advices and support for me to be a Public Finance literate. Terms like GDP, National Debt, Sovereign Ratings, Revenue, Expenditure (Operational & Development) Budget, Budget Process, Tax (Direct & Indirect), Fiscal Policy, Fiscal Consolidation and so on are currently on the top of my reading lists.

10.   I wish, I could be a better citizen and share my opinions and knowledge for the betterment of Malaysian, especially the Youth. I would like to advocate more Youth to become financial literate, so that they will in a better position to manage their financial and subsequently they will help, indirectly to make our Nation better. I hope I can help them in understanding all this financial stuffs so that they can achieve ENLIGHTENMENT and WISER in their decision making, including to vote who is going to become the Government in the next general election.

Road to Better Future: A Malaysia's Parliamentary Budget Office?

1.      In today’s morning BFM radio, the announcers discussed over an interesting topic. Apparently, the Chairman of Public Account Committee (PAC), Datuk Nur Jazlan Mohamed, the Pulai’s MP advocates the establishment of Parliament Budget Office, aimed to provide advisory services for the MPs in scrutinizing the budget. This office, he said is not under the executive branch of our Government, but solely under the authority and funded by the Legislative, the Malaysian Parliament.

2.      He concocted that, having such office will improve our MP’s debate quality through independent reports and a reference point for MP in the matter of our Government’s expenses and also overseeing lots of mega-projects planned by the Government.

3.      Personally, I applauded the idea and I support whole heartedly. It is an element of mature democracy and provides the people, better information and empower all our MPs to voice up matters that affect their constituency at best. I had this conversation before during my MBA study. One of my classmate, now working as top brass in the Treasury, have actually written his project paper/thesis on this matter. We discussed and talk various models applied elsewhere such as in the UK, US and other Westminster’s styled democracy.

4.      Why Parliamentary Budget Office? Some will argue that having PAC is sufficient and adding more bureaucratic functions in budget process will not improve efficiency and slow things down. Well, first one must understand that the PAC is merely a committee that oversee post-budget expenditure. After a budget resolution is approved by both Houses, PAC will serve as people’s eyes and ears so that, all planned expenses will be done diligently and benefited the people.

5.      However, in our Malaysian styled democracy, a parliamentary office to oversee the pre-budget process does not exist. All pre-budget process is done by the National Budget Division under the Treasury Department of Ministry of Finance. They act as the principal office which conduct last year fiscal assessment, drafting, consultations with stakeholders and expert references. There is no avenue to empower our MP, who are our direct representations in the Government. One must know that the power to withdraw money from the Kumpulan Wang di Satukan is not the Treasury but an act of parliament, approved and passed by our MPs.

6.      Therefore, part of mature democracy is where we empower our MPs to scrutinize the budget. If they rejected the notion, then don’t blame us, the people, who will write in our blogs, social media pages and newspapers. Don’t be mad at us because we do the job that supposed to be yours

7.      According to Organisation of Economic Cooperation and Development (OECD), such office is seen as a way to; Address bias towards spending and deficits, and more generally enhance fiscal discipline; Raise quality of debate and scrutiny and; promote transparency and accountability.

8.      In the US for example, US Congressional Budget Office (CBO), established in 1947 as part of the Congressional Budget and Impoundment Control Act by which congress sought to reassert its constitutional “power over the purse” (read: Kumpulan Wang Di Satukan) and create more coherent congressional budget process. It is mandated to provide NONPARTISAN, objective budgetary and economic information to the US Congress. Physically, the CBO offices are separate from the US Congress with 250 strong staff and USD 45.5 Million as budget.

9.      Another good example is the Canadian Parliamentary Budget Office (PBO). It is established in 2008 under the Federal Accountability Act in response to concerns around the credibility of government economic and fiscal forecasts, cost overruns in government programs and transparency issues. Armed with 13 staffs and an internal budget of CAD 2.8 Milion, it is mandated to provide independent analysis to Parliament on the state of the nation’s finances, the Government estimates and trends of the Canadian economy; and upon request from a committee or parliamentarian, to estimate the financial cost of any proposal for matter over which Parliament has jurisdiction.

10.   However, despite the benefits of having our own Malaysian PBO, I have to agree with my mentor/friends at the Treasury that the whole parliamentary budget processes also must be reviewed and upgraded. We don’t have our Ways and Means committee in both of our houses, to approve any proposal for tabling the budget. Put aside the issue of efficiency and fast actions. What we need now is a transparent, prudence and diligent processes since we are dealing with Billions of Tax-Payer money, my money, my parent’s money and my friends, Datuk Nenek, Pakcik Makcik, Abg Kakak’s monies.

11.   Therefore again, I hope such proposal by our PAC Chairman should be noticed and debated at national scale. The Youth, should strongly support this idea. We, the Youth must remember our responsibility as concerns citizens, future caretaker of this great nation’s affairs and protector of our posterity’s future. I as the candidate for Parlimen Belia Malaysia, will pursue this matter diligently as I believe from my knowledge and experience, it will benefit not just me, but my children’s children.

Concerned Youth

Azwan O