Keeping tabs on our money

SOON after taking office as prime minister, Datuk Seri Najib Razak promised a transparent and accountable government.

One area where openness is sorely needed is in government spending. Billions of ringgit are poured into the economy, and yet unexplained “leakages” still happen — it sometimes feels as though the Treasury department is in need of a good plumber.

(Leaky pipe image by Vivek Chugh / sxc.hu)

It’s no surprise that in 2008, the Open Budget Index (OBI), a global research body, ranked Malaysia a lowly 53rd out of 85 countries that it surveyed for budget openness. The lack of transparency, OBI noted, made it difficult for Malaysian citizens to hold the government accountable for its management of the public’s money.

The Malaysian government provides citizens with the executive’s budget proposal, the enacted budget, in-year reports, a year-end review, and an audit report. However, the OBI notes that these reports give citizens only a general, incomplete picture of the government’s plans, making government spending difficult to track.

“Also, while Malaysia makes its audit report public, it does not provide any information on whether the audit report’s recommendations are successfully implemented,” says the OBI.

In an effort to be more transparent about how taxpayers’ money is used, the Finance Ministry on 31 March 2009 announced a website to allow the public to monitor the RM60 billion stimulus package which was announced on 10 March.

First impressions

“At first glance, the website looks mighty impressive,” Centre for Public Policy Studies (CPPS) senior research analyst Noel Dass tells The Nut Graph in a phone interview. However, he says closer scrutiny of the website raises many questions.

“For example, it’s great that the website has a status semasa (current status) section which gives information on allocations for all the ministries,” says Dass. However, he says the website does not tell citizens specifically which projects the money has been disbursed to.

“There are also instances where one ministry will give money to another ministry; for example the Finance Ministry will have some allocations for projects by the Transport Ministry,” he says. “But there is no information on the website on inter-ministerial accountability as far as the details of these projects are concerned.”

DAP Member of Parliament for Port Klang Charles Santiago gives an almost identical response to The Nut Graph in a separate phone interview.

Santiago“The website is a good start as it’s helpful for people to have a general background understanding of the stimulus package,” he says. “But we need a specific breakdown of the companies and contractors that have received these allocations, and how exactly each of these projects is supposed to benefit the people.”

Santiago stresses that the devil is in the details.

“For example, if the goal of a particular programme is to create 163,000 new jobs, the government needs to give us a monthly update on how many new jobs have been created,” he says.

Weeks before the website was launched, Santiago had recommended to Parliament the establishment of:

A parliamentary select committee that reports periodically to Parliament;

A dedicated website informing all Malaysians on how, when and where the funds are being spent.

The importance of being earnest

Santiago points out that simply having a good website will not solve other problems that are inherent in the formulation and implementation of the stimulus package.

“Why, for example, was a second stimulus package to the tune of RM60 billion announced when the monies from the first RM7 billion stimulus package have not been completely spent?” he asks.

According to Santiago, stimulus packages are meant to be short-term measures to pump prime a sluggish economy. They are not meant to be long-term and shrouded in secrecy.

(Syringe image by hksusp / sxc.hu; Australia image
source: Wikipedia commons)For instance, the Australian government injected a massive AUD$10.4 billion into the country’s economy in December 2008 to stimulate spending. Although data from the Australian Bureau of Statistics showed that the injection succeeded in stimulating retail spending that month, the government quickly realised that it was not enough. It thus announced another AUD$42 billion stimulus package in February 2009.

Santiago estimates that an ideal period for all monies in a stimulus package to be spent would be within one to three months.

“Right now, the perception among many is that the stimulus packages were announced merely to save the Barisan Nasional federal government,” he says. According to him, it is up to the government to prove these allegations wrong.

CPPS chairperson Tan Sri Ramon Navaratnam agrees, and goes one step further.

“Giving out contracts and starting contracts are two different things,” he tells The Nut Graph in a phone interview. He says that the government might report that a specific contract has been awarded, but the public has the right to be informed of the commencement and subsequent progress of the project.

“It is in these progress reports that the public can identify if there are any variation orders in the project,” says Ramon.

For example, a contractor may have initially been awarded a particular project by offering the most competitive bid, such as RM100 million. But halfway through the project, the contractor may find that the project was actually undervalued, and needs an additional injection of RM50 million. Thus, the public needs to be informed of why a project initially valued at RM100 million now actually requires a total expenditure of RM150 million.

“When such variation orders are not explained and accounted for, this leaves room open for corruption and excesses,” explains Ramon.

New bag, old tricks?

Although the website to monitor the two stimulus packages is a commendable start, The Nut Graph found that even getting public officials to talk about it was an uphill task.

Our calls and e-mails were shuffled from the Economic Planning Unit (EPU), to the Implementation and Coordiation Unit (ICU) of the Prime Minister’s Department, to the Planning and Management Unit (PMU) between 19 and 27 March.

Unstable money (Pic by nkzs / sxc.hu)Five working days, three government departments, yet zero information on how the stimulus packages were to be monitored.

Not all hope is lost, however. As Dass and Santiago point out, the fact that the website is finally up and running is good news for citizens.

“But NGOs, academics and businesses can come together to provide an extra layer of scrutiny for these stimulus packages,” says Santiago.

He also stands by his initial proposal for the setting up of a parliamentary select committee to scrutinise all related accounts and report these findings to Parliament.

As Dass says: “The stimulus package is essentially the rakyat’s money and therefore they have the right and responsibility to ensure its proper use.”