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5.5 POLITICIZATION OF THE BUDGET - Coggle Diagram
5.5 POLITICIZATION OF THE BUDGET
Definition
Scenarios concerned with the parties and factors which are involved in budgetary process of the government.
Parties involved in budgetary process
Public
Citizens from all walks of life with various needs, demands, interests & expectations from the government
Civil Servants/Government machinery
Controlling Officer, Auditor General, Accountant General, Central Agencies etc - government machinery
Legislators
Parliament (House of Reps & Senates, PAC) - legislative authority to pass various laws involving public finance
Administartors
The Cabinet (PM, DPM, Treasury) - primary policy makers
Interest group
NGO, OKU, Pensioners, Trade Union, Religious Groups, Activists etc
Factors influencing government budgeting
Leadership
Influenced by vision enunciated by PM or his preferences
eg : Vision 2020 - Tun Dr. Mahathir allocated RM69 billion in RMK5, 89% is for the socioeconomic expenditure to ensure the development and achieve the status of Developed Country
Decision making/Policy model
Various major policies such as Malaysia Plans, Industrial Malaysia Plans, National Action Plans, etc
eg : To eradicate poverty and correct the racial economic imbalance, Tunku Abdul Razak has introduced New Economic Policy
Formed agencies such as : MARA, FELDA
Current trend
Globalization, emergence of advanced ICT, new technologies, new pandemic, natural disasters etc
eg : The government plans to spend more than RM2 billion to repair and refurbished roads, bridges, slopes and buildings that were damaged and destroyed by the recent flood (Malaysian Reserve, April 8, 2015)
Political factor
Ruling vs. opposition parties
Manifestos
eg : The implement BR1M's policy, government have to allocate RM4.6 billion which expected to benefits 7.9 million recipient as promised in PRU13's manifesto
Economic condition
Inflation, unemployment, exchange rate etc
eg : In Budget 2013, the Prime Minister has allocated RM440 million to provide loans for trainees to undergo skills training in order to enhance the necessary skills and knowledge that incline with the job market to solve the problems of unemployment
Budget cycle
Preparation
Treasury sent out circular stating policies/priorities for the year budget to all depts. & ministries
Treasury call - circular budget from Treasury, complete with ceiling for each departments (based on Expenditure Target)
Government departments prepares budgetary estimates & submit to Treasury
Treasury reviews & send back if modification need to be made
Government departments make necessary changes & submit the final draft
Compilation of estimates by Treasury
MoF bring the compilation to the Cabinet for approval in October, finalized in December
Approval
MoF presents budget speech & Supply Bill in Dewan Rakyat (House of Reps.) - 1st reading
Supply Bill is represented - 2nd reading
Amended bill read - 3rd reading
If approved by 2/3 majority, then bill goes to Dewan Negara (Senates)
In Dewan Negara, the process in Dewan Rakyat repeated except that Dewan Negara could not make amendments in the bill
Final approval - Royal Accent by YDPA within 30 days
The approved budget become Act and gazetted (to infrom the people)
Implementation
Treasury send out general warrant to Accountant General
Accountant General disburse funds according to appropriations approved (allocated to various parts)
Government departments carry out collection of revenue & expenditure
Submit financial statements & accounts
Audit/Evaluation
To examine whether fund allocated have been used in accordance to what Parliament has approved
2 types :
Internal - conducted by authorized officers within the agency/depts
External - conducted by Auditor General to produce Financial Statement & present full report to Parliament each year