KUALA LUMPUR: The Public Finance and Fiscal Responsibility Bill 2023 which aims to ensure transparent spending by the government has received the nod from Dewan Rakyat today.
The legislation expands the legal recourse to allow the government to be held accountable in managing public finances and fiscal risk, particularly in relation to the nation's revenue, expenditure, loans and debt, reporting annual budget documents and other document publications.
Deputy Finance Minister I Datuk Seri Ahmad Maslan said the bill will also enhance the national framework of public financial management while complementing the Financial Procedure Act (FPA) 1957.
He added that the bill was also crucial to ensure the resilience of public finances and improve the efficiency of the state's fiscal resources which would allow adequate allocations to be provided.
"Since 2017, the Finance Ministry has explored measures to enhance public financial management through improved fiscal discipline, effective spending and transparency reporting.
"Following this, the introduction of the legislation is one of the keys to fiscal reformation in the country, which will ensure fiscal sustainability through responsible fiscal management principles," he said in his wrap-up speech during the bill debate session in Dewan Rakyat, today.
The bill also comprised four numerical aspects, including having annual development expenditure as a percentage of growth domestic product (GDP) of at least three per cent; fiscal deficit as a percentage of GDP of negative three per cent or less within three to five years; debt level as a percentage of GDP at 60 per cent or less within three to five years; and financial guarantees as a percentage of GDP not exceeding 25 per cent.
The government must also explain in Parliament if any irregularities occur, preventing the four aspects from being achieved.
Meanwhile, the government must also publish a mid-year financial performance report annually once the legislation comes into force.